Page 206 - Budgeting for Managers

Mastering the Budget Process
You can do the same for all of your spreadsheets and for all
periods: months and quarters as well as years. For the items
that have fixed future costs (such as rent on a long-term lease),
you can even put the numbers in a year ahead of time. Keep
these templates with your notes about creating the budget. 189
The 15-Month Budget
Some businesses use a technique called the 15-month budget
that can really improve the quality of estimates and help busi-
nesses run smoothly.
Here’s how to set up a 15-month budget:
1. Start two months before the fiscal year.
2. Make a 12-month budget for the fiscal year. At the same
time, set up a template for the following year and fill in
what numbers you can.
3. Make a very careful, detailed budget for the upcoming
quarter (the first quarter of the upcoming fiscal year).
4. Use the quarterly budget from step 3 to create a quarterly
budget for one year later.
5. Now you have an estimated budget for the next five quar-
ters—15 months.
6. Three months later, create the budget for the 2nd
quarter of the following
year. Budget Time Frames
7. Every three months, A 15-month budget is one
create the budget for version of a rolling budget or
another quarter a year continuous budget. Some companies
ahead. use a 12-month budget that rolls for-
8. When you get near the ward one month as each month is
end of the fiscal year, completed.That approach allows for
greater accuracy, but it also means
check the entire next
working on budgets every month.
year’s budget and
With a rolling budget appropriate to
make it as good as your situation, you can escape the
you can before you get confines of the year-by-year calendar.
it approved.