Page 144 - Budgeting for Managers

Budgetary Spending
•Change your work plan by eliminating specific activities
and then revise the budget to reflect the fact that you are
doing less work for less money.
Where can you go for alternative sources of money? That 127
depends on your company. If you provide support within a
company, you can turn to the departments you serve. They
may have some discretionary funds. If you can convince those
managers that their money is best spent on your project, they
might chip in so that they can get the services they need from
your department. If you work for a research organization, such
as a university, you may be able to apply for a grant.
If the budget that came back to you seems impossible, then
perform a gap analysis. If you use the reduced budget as best
you can, what work will not be accomplished? What specific
items do you need to buy and services do you need to acquire
that you can’t afford with the approved budget?
Lay out a clear picture of the problem, showing what you
can do and what you can’t do with the approved budget. Then
take this to your boss. Walk through it with him or her. Your job
is to show the consequences of different options and let the sen-
ior managers decide what they want to do.
Do not start by being either defensive or hostile. Simply
present a choice to your boss or senior management:
• Here’s what you asked me to do originally and here is
what it would cost. (Show the original work plan and the
original budget, revised downward a bit if possible.)
• Here’s the revised budget and here’s the work I won’t be
able to do if we have only the funds from the revised
budget.
• Here’s the difference in dollars.
•My question is this. If you want all the work done, can you
come up with the necessary money so the department
can do the work? If not, do you authorize the changes in
the work plan?
At that point, you hope the people you are negotiating with