Total Tax Accountants BUDGET   HISTORICAL ORIGINS Uncategorized

The term “budget” comes from an old French word, “bougette” or “petite bouge”. The move (from the Latin “bulga”) designated in the Middle Ages the chest or bag in which the traveler took his personal effects (we now use the word “luggage” …), or the purse in which he was trapped its crowns.

A long trip cannot be improvised, you have to plan, plan the stages at the hostel, and have the necessary amount. The bougette is there for that. What better symbol to find for forecast management?

The term was then taken up by the English, at the end of the Hundred Years War, at the time when parliamentary institutions were born. The “budget” becomes a concept of public law, to designate the amount of money allocated by a vote of the Parliament to an administrative entity for its functioning: each minister thus has a small abstract move (a “budgetary envelope”) in which it can draw on (we also speak of a ministerial “portfolio”, which refers to the same image).

Note that this budget allocation mechanism allows the State to solve a delicate management problem: how to decentralize while retaining control. The vote on the budget makes it possible to regulate the “agency relationship” between the State and the different authorizing officers of expenditure, insofar as an expenditure can be incurred only if it has been foreseen within the framework of a budget line.

At the beginning of the 20th century, we witnessed the development of large companies which, because of their size, experienced identical problems of decentralization, coordination and control. These large companies will naturally transpose the budgetary procedure for their internal management needs. The budget becomes an essential instrument of emerging management control.

Indeed, how can a large company maintain control over the operation and development of a large number of establishments, services, subsidiaries?

Quite simply by centralizing strategic thinking, decentralizing operational management and controlling the system by a procedure of budgetary allocation of resources, in particular financial. We can therefore say that companies have “copied” the administrations and the functioning of public accounting, which deserves to be underlined and pondered, at a time when the dominant discourse consists in criticizing the “bureaucracy” and giving the efficient management of private companies as an example to administrations!




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