The professional secret to successful company budgeting
You have a budget in place to manage your company's finances.
In addition, you have the knowhow on spreadsheets because you believe this is the secret to successful company budgeting.
This is partly true. Spreadsheets are important, but successful company budgeting goes beyond spreadsheets.
Keep reading to discover the professional secret to successful company budgeting so you can get the most from yours.
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Believe it or not, but 'people management' is the secret to successful company budgeting
According to Tim Berry, a business planning expert, successful budgeting goes beyond numbers, it depends on people management.
Berry goes on to say, to make your budget work, you need to add real management. This means:
1. You must understand that it's about people: Successful company budgeting
depends on people management more than anything else. Every budgeted item must be 'owned' by somebody. This means, the owner has a responsibility for spending, authority to spend and the belief that the spending limit is realistic.
'People who don't believe in a budget won't try to implement it. People who don't believe that it matters won't worry about a budget either,' says Berry.
2. Budget 'ownership' is critical:
To 'own' a budget item is to have the authority to spend and be responsible for spending. Ideally, a budget management system makes plan-vs. actual results visible to a group of managers, so that there's peer pressure that rewards budgeting successes and penalises budgeting failures.
3. It's also about following up:
According to Berry, unless the people involved know that somebody will be tracking and following up, they won't honour a budget. Publishing budget plan and actual results will make a world of difference.
Here's the bottom line: People management is the secret to successful company budgeting. If you don't have your people on board, your budget will fail because ultimately, it's your managers who must implement your budgets. So get the concept of people management right and you'll also get the most from your budgets.
PS: For more budget tips, we strongly recommend you check out the Master Budget Series.
It has everything you need to know about company budgets.
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