Many environmental problems are caused by changes in aspects of the hydrological cycle. Water balance modelling combined with field experiments can give us a better understanding of the components of the hydrological cycle from which to develop appropriate management options. Water balance models can be constructed at any level of complexity. In simple ‘bucket’ models only the most important processes are represented. When appropriately used, bucket models can provide useful insights into the functional behaviour of a system. Complex models are needed to understand complex feedbacks and interactions among different processes of the system. However, increasing the complexity of a model does not necessarily lead to a more accurate model and it is essential that model complexity matches the availability of data. The key to successful water balance modelling is to have a clearly defined objective and to select an appropriate model. This chapter outlines the principles of water balance modelling and explains how models can be used in crop management.