I wish I could tell you that budgeting is straightforward and done in a businesslike manner. Not so. For instance, if resources are scarce, there will be competition for resources, which can often lead to deliberate overestimates. Many turf-oriented managers may argue that they represent major revenue sources and consequently need funds that can only be cut from your budget. Don’t get caught up in this budgetary game-playing if you can. Come prepared to defend your needs, but be prepared to amend your budget, prioritizing how funds will be spent as a consequence. The operational plan may have to be revised.
Tips
Allow for the impact of inflation on expenses.
Check last year’s budget to make sure you’ve included all the operating costs.
If you have objections, consult with those involved in changes to the budget—but be tactful.
See Also
Fields, Edward. The Essentials of Finance and Accounting for Nonfinancial Managers. AMACOM, 2002.
Godin, Seth and Paul Lim. If You’re Clueless about Accounting and Finance and Want to Know More. Dearborn Trade, 1998.
Rachlin, Robert and Allen Sweeney. Accounting and Financial Fundamentals for Nonfinancial Executives. AMACOM, 1996.