Do you have a budget to manage and you’d love to know how to do it better? Then read on!
1. Understand your monthly results
When you review your monthly budget report, you are looking for variances (differences) between the actual results reported and those budgeted. What are the reasons for those differences?
Did you win a new contract which explains why your sales figures are higher than expected? Or did you spend more this month to benefit from bulk buying discounts and you know your expenditure will therefore be down next month?
The figures are simply the representation of what is happening in the real world shown in pounds and pence. You know your department better than anyone so the figures should not come as a surprise.
2. Ask questions
If you are unsure of anything at all on your monthly financial report, ask your finance representative. And don’t stop asking questions until you are completely comfortable with the answers. Those numbers are your responsibility and you have the right to know what they are showing.
Shock, horror, there may even be an error in your results – don’t let this adversely affect your bonus! Know exactly what is included in your figures and ensure you are on track.
When you really understand your figures, life gets more exciting! You have the power to see better into your future and can make better business decisions as a result. Just think what that can do for not only your business unit but also your career!
Don’t just be satisfied that you’re hitting your targets – how can you smash them? How can you improve on last year’s performance? How do you compare to other departments in your organisation? What can you learn from the performance of others that you can bring into your area of the business? How can you be the trailblazing department?
Managing your budget should not be a necessary evil or something to be dreaded each month – use it to transform your performance. Good luck!
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