Page 205 - Budgeting for Managers

Budgeting for Managers
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Don’t Play the Blame Game
It’s often far too easy when discussing variances between
budget estimates and actual results to get into the blame
game. Simple questions about the reasons for the variances can make
people feel defensive—and soon the budget meeting becomes more
about personal survival than understanding the fiscal situation and
developing more accurate estimates. Be sensitive to the people behind
the figures and focus on the future: two ways to avoid the blame game.
actions. Then two people leave your team in the middle of the
busy season and things fall behind. There’s no need to blame
anyone. You all just do your best and start over. You can take
this “no blame” attitude in relation to any error, whether it’s an
error in estimation, a failure to track expenses, or some other
procedural mistake.
Timing Your Budget Preparation

All too often, we wait until there isn’t enough time to prepare
the budget for the next period or the next year. There’s one
good reason for waiting: the better figures we have for this year,
the better basis we have for estimating figures for next year.
However, we shouldn’t wait too long. If we do, the benefits of
having better actual figures will be less than the costs of not
having enough time to do a good job. Here are two tips for
making your new budget at the right time.
Preparing Templates for Future Periods
You can start some of your budgeting work a year ahead of
time. When you finish this year’s budget, immediately make
templates for next year’s budget. Simply add a column for the
next year. Your column headings might look like Table 12-1.
Save the spreadsheet and be ready to use it next year.

Item 2003 Estimated 2003 Actual 2004 Actual

Table 12-1. Column heads for a future budget