Page 125 - Budgeting for Managers

Budgeting for Managers
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Saving Money Through Careful Planning
When Robert was working with the consultant to create
the project budget for the inventory system, the consultant
mentioned that it was too bad that Robert needed only five comput-
ers for the warehouse. If he needed 10 or more, then the vendor
could give a discount for bulk purchase. Robert had chosen to buy all
the same brand of computers for upgrades, new purchases, and the
inventory system, because that reduces maintenance costs. He realized
that if he ordered all the computers from the vendor who was supply-
ing the consultant for the inventory project, he could get the discount.
And, with the discount, sales tax would also go down.
Robert did more than consolidate his budget on paper. He consoli-
dated the purchase orders, saving his company $2,683.
about your thinking only to yourself. You should review them by
asking the question, “Will I understand this note a year from
now when I need to make a new budget?” If yes, then the note
in the spreadsheet is just fine.
However, when it comes time to finish your budget for pres-
entation, you may want to write it up quite differently. First, you
should ask the accounting department for examples of the
budgetary assumptions that they like to see. Second, you
should ask your boss what he or she wants to see.
It is likely that they will want to see different things. The
financial department will want to see relatively few assumptions,
as accountants and financial managers use the budgetary
assumptions page only to identify things that are out of the ordi-

Use Spreadsheet Comments for
Budgetary Assumptions
If you’re using Microsoft Excel or a similar spreadsheet pro-
gram, an excellent way to take notes is to use the cell comment fea-
ture. If you choose a cell with the mouse pointer and right-click, you
can access a menu that includes the Insert Comment command.When
you insert a comment, a tiny triangle in the upper right corner of the
cell shows the comment and the comment pops up in a small text box
to show the note we’ve written. Once a comment is in place, the
right-click menu gives us new options: show, edit, or delete.