This chapter helps the reader to understand the different types of budgets and their purpose; to understand a typical budgeting process; and to apply the process to develop the operating budget. The budget is a planning tool that provides leaders with guidance for monitoring a business enterprise. Effective budgeting serves four primary purposes: planning, allocating, communicating, and managing. Budgeting is the formal planning process to support the organization’s mission and strategic goals and to make sure it can meet its financial obligations. The chapter presents common types of budgets, their measurement indicators, and the key activities or actions that influence their development. The budget development process is necessary and useful for supporting the organization’s strategy and goals. Developing the operating budget is a dynamic process, and being able to incorporate new information that affects budget projections is important to develop as reasonably accurate a budget as possible.