The process of budgeting is when a compilation of all the
relevant figures pertaining to the company's expenditure patterns is
done. This is not somethings that can be done overnight but something
that takes a reasonable amount of time. A budget is a business tool that
every manager must have in order to monitors to movements of funds in
their specific areas. From time to time, a manager should be able to do a
report which explains the variances that occur between what was
budgeted and what was actually spent. Just like any other tool that a
company decides to use, the effectiveness of a budget is subject to the
leadership's willingness to adhere to the tool or else it just becomes
another good idea. As a rule, in most companies, whatever is not
budgeted is never approved for expenditure or rather it does not become a
priority when funds are allocated.
Guidelines
Verify and get justifications for huge figures - It is one thing to have a figure on your budget and yet another thing if you are asked to justify the increase or decrease in the allocation. Every huge figure must be debated. To make it easy, before the consolidation actually takes place, it is wise to debate the top ten costs of each department. You will see that some people simply "throw" figures on budgets
Guidelines
- Time - The budget process is not an event but as mentioned, it is a process. Compiling budgets rather hurriedly is tantamount to coming up with information that is of no use in decision making. Always allocate time to everyone who is participating in the process. Prepare people ahead of this process so that when the time comes they are mentally and emotionally ready to handle the pressure that comes with this process.
- Every department participates - A wise finance manager does not guess figures on behalf of departments but he/she delegates the process of budgeting to the individual departments. Chances of forgetting even some crucial elements of the department's needs is very high if you choose to thumb-suck a budget for them.
- Provide a template which is easy to follow - Of you give people a template to follow, this will help immensely with the consolidation processes. When it comes to a point of combining these budgets, you can literally automate the process easily if the formats that people are following are similar.
-Hold budgeting seminars to educate people on how to effectively participate - This is for the purposes of getting everyone to be on the same page of understanding the needs and demands of the budgeting process. In these seminars people get to ask questions and in the process of answering those questions, people are actually being helped.Use past performances as guidelines - If you had a budget last year or last quarter, it is wisdom to refer back to it so that you are able to come up with another budget a lot quicker. Doing so ensures that nothing is left out.
Verify and get justifications for huge figures - It is one thing to have a figure on your budget and yet another thing if you are asked to justify the increase or decrease in the allocation. Every huge figure must be debated. To make it easy, before the consolidation actually takes place, it is wise to debate the top ten costs of each department. You will see that some people simply "throw" figures on budgets
Rabison Shumba is a young African entrepreneur who has interests
in Information and Communication Technology, Agriculture and Mining. He
is also a motivational speaker, trainer and author. His book, The
Greatness Manual and various online articles are tools for personal and
professional development. Together with 100 other Career Experts,
Rabison co-authored the 101 Great Ways to Enhance your Career. Rabison
has a personal vision of impacting the lives of children in marginalized
communities by creating platforms for career counsel and guidance,
information empowerment and capacity building through the Greatness
Factory Trust, where he currently holds the position of Chairman of the
Board of Trustees and Acting Executive Director. He is actively involved
in the organization of career enhancement and guidance colloquiums to
propel and inspire both young and mature professionals to greatness. His
areas of expertise include strategy, leadership, personal and
professional development. Rabison is married to Jackie, and they have
two daughters. They reside in Harare, Zimbabwe.
[http://www.greatnessmanual.com] or http://www.lulu.com/spotlight/rshumba
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