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Every reputable accountant would mention budgeting, the preparation and overseeing of a financial plan that estimates income and expenses over a certain period, as part of their responsibility in every business. Budgeting is one of the most important financial skills a manager needs.

For managers, this is a vital tool to communicate goals and expectations to staff and 3rd parties, for assessing group or individual performance, and for allocating resources strategically and appropriately.

TIPS

Pre-plan

Communicate with all Senior and department managers to ensure you are on top of their expectations and timelines. They may have specific financial targets that should be incorporated and deadlines for receiving the budget.

Follow the business plan

Especially if this is the first budget, the business plan would have a certain vision and mission. This will assist in determining financial objectives and timing as well as set the arena for measuring performance.

Evaluate Performance

Do performance evaluation at the appropriate timelines. Evaluating performance at the wrong time might cause the results to be tainted by normal seasonal fluctuations or other external factors. Act where necessary on adverse outcomes or consider adjusting the targets for favourable outcomes.

Communicate Outcomes

Establish regular meetings to communicate outcomes to management. Use visualisation techniques and be sure to point out accomplishments as well as challenges that could have an effect beyond your direct reports. Keep staff in the loop of their contribution towards the outcome as this could make them feel motivated and engaged.

Budgeting can seem a daunting task, but it is vital. If you need assistance, please contact Multical. We will gladly help.

 

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