Page 68 - Budgeting for Managers

Gathering Production Figures
Check Categories Before Creating Estimates
Whether or not you change line item categories, you
should check your list of categories (and account codes, if
your company uses them) with the accounting department before you
get too far on your budget. It is easier to get all of the categories and 51
account codes correct and approved, and then work on your esti-
mates. If you do the estimates, and then need to change your cate-
gories, it takes a lot of extra work and it’s easy to make errors.
entries that might point to poor record keeping. If there were
none, trust the figures you have. If there were any, ask the
accountant to let you know which line items had errors and
help you decide on the best figure to use for future
estimation.
On the other hand, if Adjusting entry An entry
you were digging receipts made by an accountant to
out of old shoeboxes, then fix errors, make up for lost
information, or adjust internal books
you have less reason to
to match the books filed with tax
trust last year’s figures.
forms.
Here are some things you
can do:
•Assume that bank records, cancelled checks, and ven-
dor records marked “paid” were verified by someone
who probably kept good records. They are more trust-
worthy.
• Contact vendors and banks and ask for records of any
business with your department for the past time period.
•Sort your sources and decide which ones are more reli-
able. If there were good records in some months and not
others, then use the months that had good records to
make a good guess at the other figures.
•Use common sense. For example, if you’re managing a
Christmas gift shop and you’re missing last year’s figures
for November, don’t use August figures for November.
Use an average of the last week in October and the first
week of December for each week in November.