From my own experience, I was asked to prepared for first time a budget for my department.
Creating the budget of my department helped to measure my expenses, to calculate my productivity, to show savings, to proved progress.
I agreed with you, I utilized my budget as a guide and to I monitotored my badget closely.
It is definaltly a helpful tool.
I completely agree. It gives us a clear picture and the confidence to make the right decisions for our business based on facts and figures.
Jay, I completely agree with your planning statement. It works with all departments requiring them to look out into the future, set goals, and prepare their part of the budget to accomplish the goals for their department. Also, it allows each department to be a part of the planning and goal setting process rather than just relying on historical budget data for the department.
Yes, the budget helps keep your day-to-day operations in check. If a department starts to overspend, you can review and make corrections.
I agree that a budget is both a planning and operational tool. A budget gives you a parameter of what you have to work with as well as goals you need to achieve.
A budget is a clear and precise outline of metrics. It is a much needed tool across organizations.
Thanks Deirdre, and as a set of metrics, both planning and control tools!
Jay Hollowell
Yes I agree. Not only is it a planning tool there is also a need to be very methodical. This will help ensure an accurate budget. This sheads a different spot light on the budget. It's more than just crunching the numbers. It is a sytematic plan of measuring performance and predicting performance as well.
budgeting is a huge part of a business, It is important to keep your money and exspenses on track as well as to ensure you have the exspenses for the future of your business in the long run.
A budget is absolutely a planning tool. It is a road map to achieving established goals and objectives and setting priorities.
A budget should be carefully monitored and adjusted accordingly.
Elizabeth,
Thanks for your observations. To your point, the key word is "adjusted." In essence, the budget is a living document or tool that, within parameters, allows for contingencies and can do wonders in controlling costs.
Jay Hollowell
I agree that the budget is a planning tool.
I agree that a budget is as much a planning tool as an operational tool. As a school looking to add a new program we have used developed a budget to see what the cost of starting the new program verses the equipment and associated costs for marketing, labor, overhead, etc, verses the price the market will bear for the cost of the program, to see how long it will take to recoup those costs and make a profit. Without this prior planning and budgeting it would just be a guess as to the viability of the program.
