Page 203 - Budgeting for Managers

Budgeting for Managers
186
How can you present your work plan and budget to
address those issues?
• Is the company’s decision process well defined?
•Are the company’s criteria for making budgetary deci-
sions rational? Or are the decisions based on narrow
thinking or politics?
•How can you open a dialog, listen to the needs of execu-
tives, and get a chance to respond to them?
Keep all of these issues in mind as you prepare your budget
proposal and decide when and how to present it.
Improving Your Estimation Skills
As we said at the beginning of the book, estimation is essential-
ly careful guesswork. There are several things you can do to
improve your estimation skills.
Year by Year
If you keep good records when you prepare your budget, you’ll
be able to remember your thinking when the next year comes
around. You can check your thinking against reality by compar-
ing the year’s actual results with your estimate. As you do,
here’s what you can do to improve your skill for the next year.
For each line item estimation:
• If your estimate matches the actual closely, good job! Do
the same process this year. But don’t just use the same
number. For example, if your process was to interview
customers, interview them again, rather than copying
over last year’s numbers. Be sure to take into account
any changes from last year to this. For example, if last
year you interviewed your five biggest customers, then
don’t interview the same customers this year. Instead,
interview this year’s five biggest customers.
• If your estimate was off in either direction, first ask what
you missed. Check your notes. What made the actual
results differ from your estimate?