Page 146 - Budgeting for Managers

approved. The goal of these procedures is to set up the tracking
system that will record expenses against the budget throughout
the year.
Determining the Spending Period Budgetary Spending 129
Typically, budgets are annual. However, check with accounting
to be sure. Make sure you know the start dates and end
dates of the accounting
year. Also, be aware of Blackout period A period
blackout periods when of time set by the account-
spending is not allowed. ing department or senior
executives during which you may not
Some companies request
make purchases or spend money for
that you not spend money
your department.
in the last days of a month
Closing the books Work done by
or quarter or year or at the
the accounting department to recon-
beginning of a new year.
cile and check all accounts so that
They do this so that it will financial statements can be prepared.
be easier to close the Typically, this is done every month,
books for each period. In with some extra work each quarter,
these cases, you’re likely and a lot of extra work at the end of
to see a memo that reads the year.
something like this: “All
purchase orders must be submitted by December 20 to be
included in this year’s budget.”
There may be additional restrictions about when you can
spend money during the year. The accounting department may
assume that you spend money steadily each month or each
quarter. You may need to tell them otherwise, particularly if
you’re going to spend a lot of money early in the year.
To summarize, when you set up your budget with account-
ing, be sure to:
•Determine the beginning and end of the budget year.
•Find out about any blackout periods where you can’t
spend money. Then, place your purchase orders in time.
•Tell accounting about any unusual spending, especially
higher spending early in the year.