Page 25 - Budgeting for Managers

Budgeting for Managers
8
Production and Projects
Robert is the manager of an information technology
department, which keeps all of the computers running and
also installs new systems. In planning for the coming year, there are
three big parts to his budget: support, providing computers for new
staff, and installing a new warehouse inventory system.
For the support plan, he builds his budget based on last year’s budg-
et, because he expects support for next year to be pretty much like
last year.To purchase and install computers for new staff, he talks to
HR and learns how many people will be hired each month and which
ones will need computers.Then he builds a plan to provide computers
before the new employees start work and writes a budget for that
project plan.Then he consults with the vendor who’s providing the
warehouse inventory system and creates a project plan and a budget.
Line items in his budget may be a combination of all three parts.
For example, the figure for the cost of new computers would include
new computers to replace old ones from support, new computers for
new staff, and new computers for the warehouse.
over or before the information on this year’s expenses is ready.
Sometimes, we can find out what we spent, but we can’t get the
answer to the magic question: Why?
For now, let’s say that we manage to gather information on
what we spent last year. Our example is a budget for the

Using a Spreadsheet Program
A spreadsheet program can take a lot of the tedium out of cre-
ating a budget. If you know the basics of a spreadsheet program, it
will take care of addition, subtraction, and simple percentage increases
for you. Later in this book, we’ll show you how to have the spreadsheet
program check your work for you as well. Many managers take the time
to learn advanced spreadsheet functions by taking two or three days of
classes or by reading a book and working through the exercises.
There are three popular spreadsheet programs available. Microsoft
Excel™ is packaged with Microsoft Office™, so it’s probably the most
available. Microsoft Works™ contains a spreadsheet tool that is good
enough for simple budgets and costs a good deal less.And some com-
panies use Lotus 1-2-3™, which is just as good as Excel for everything
you will need to do in a budget.