From the course: Finance for Non-Financial Managers
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Review of the budgeting steps
From the course: Finance for Non-Financial Managers
Review of the budgeting steps
- Let's review the steps associated with a simple budgeting process. Step one, write your budget down. I like the quote, "A goal not written is only a wish." If our budget isn't in writing, we might as well just cross our fingers, close our eyes, and hope for the best. Now, of course, in this context, in writing typically means that the budget plan is recorded in a computer document such as a spreadsheet. Step two, identify those areas for which you are responsible and which you control. It's not fair to have someone be accountable and answerable for something over which they have no control, and when people in an organization feel that something is being done that is not fair, that generally indicates that the thing is also not a good business practice. Step three is to quantify expected results. Now, the budget quantities may be in dollars, as was the case with the price per board foot in our tabletop example, or the budget quantities may be in units, as was the case with a number…
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