Much has been written about the value of having a budget to manage the financial affairs of a business. And the premise of all those paragraphs of prose is correct: A budget is the most powerful way to achieve profit goals. However, the assumption seems to be that once you have a budget, your work is done and your staff will inherently know what to do with it. This is because: They were born knowing about budgets, They learned about budgets in kindergarten, or Their parents taught them about budgeting their $5 a week allowance. Of course, virtually none of these assumptions is true. As a result, the actual steps to managing a budget often get overlooked, and therefore under-learned. Aside from the obvious, like accurate bookkeeping and understandable reports, heres a quick checklist of six basic techniques for managing the details of a budget. And by managing, we mean sticking to the budget, not creatively explaining why you didnt. 1.Look at the budget before you commit funds. It seems logical to assume that you have to know what youve budgeted to spend before you make a spending decision, but it rarely works that way. Look first, then commit. 2.Use thats all I have in the budget to negotiate price. Your budget is a perfectly legitimate objection to a vendor proposal that exceeds the budget. If youre not authorized to spend more than is in the budget, tell your vendorthis isnt unfair or illegal. They may want the sale badly enough to meet your constraint. 3.If you absolutely have to spend money for something thats not in the budget, remove or postpone a like amount of money from something else that is in the budget. This is called a trade-off. Spend a little more here, a little less there, and make things balance at the bottom. Almost never does every dollar have to be spent the way you originally planned it. 4.If revenue doesnt develop as planned, plan to under-spend accordingly. The budget is about the bottom line, ultimately. If revenue is less than planned, you likely dont need as much expense to support it. So determine what was planned to support revenue that didnt come inand dont spend it. 5.Timing is not trivialdont spend ahead of schedule. If you must spend before you planned to, postpone something else in the same time period until you can catch up. This is another trade-off. 6.Oops! is not a good explanation for overspending. If you inadvertently overspend, drop something else thats in the budget, or at least defer it until you can make up the difference, even if its a later period. This is yet another form of trade-off, best avoided by referring to technique #1 above. Most CEOs would agree that these steps will make their company budget more effective. That is, most CEOs of companies that actually have budgets, which is not most companies. Most CEOs will also say their managers should do a better job at budgeting, while others might say these CEOs should do a better job of training their managers. Me? Im just sayin. About the Author: Gene Siciliano, CMC, CPA, is an author, speaker and financial consultant who works with CEOs and managers to achieve greater financial success in a dramatically changing economy. Genes best-selling book, Finance for Non-Financial Managers (McGraw-Hill, 2003), and his new book, Financial Mastery for the Career Teacher (Corwin, 2010), are both available in bookstores and online. More information and free articles are available at .www.GeneSiciliano.com. Article Published On: ..articlesnatch.. – Small Business 相关的主题文章: