There once was a Finance manager who met a fisherman. “Could you please tell me about your life and your work?”, asks the Finance manager. “Well, I am at sea for five months and then I am home for five months”, the fisherman responds. There is a long pause. Our Finance manager is thinking hard. Something is wrong; five plus five is only ten! ”So what are you doing in the two last months?”.

A financial plan is a product used for guiding people’s actions toward the accumulation of wealth.  As a product a financial plan is created from a variety of sources.  One source used for creating a financial plan is economics.

Although Beyond Budgeting is about so much more than just budgets, our name tends to draw people, at least initially, towards the budget word. Once there, cost management often pops up as the number one issue, for obvious reasons. How can we manage cost without a budget?

Business schools tend to divide their curriculum between hard quantitative-oriented courses, such as operations management and finance; and soft behavioral courses, such as change management, ethics and leadership. This separation of the curriculum is like chambers in a mansion.

The purpose of a statement of cash flows is to describe how businesses receive and spend money.  This purpose is seen as an end result of financial planning but this purpose can be seen as a starting point of financial planning.  As a starting point of financial planning, people should think about how to accumulate wealth from the receipt and disbursement of cash.

“Control” is an interesting word in the management vocabulary. It is a word many managers struggle with defining. Beyond “cost control”, most are quite vague when it comes to other definitions.