4 Tips to Effectively Manage a Budget at Work
Being a manager means wearing a lot of hats on a daily basis. In addition to being proficient in skills like change management and decision-making, managers need to be able to understand the concept of budgeting to boost performance and generate value. The majority of employees that get promoted to managerial positions do not have a clear idea of how to operate a departmental budget.
There’s good news if you’re a new manager looking to learn to budget on the fly. There are several best practices and techniques that managers can learn to manage budgets at work effectively :
#1 Understand organisational goals
The first step to successfully creating and managing a budget is to fully understand the company’s goals for the budget and its finances. This knowledge can help you clearly understand how your team and its efforts fit into the company’s key objectives. When you fully understand your company’s projected revenue, expenses and income, you can be better prepared to make changes and address problems that might arise.
For example, if you are aware that the company wants to spend less than €50,000 annually in a specific area and you have been spending €5000 a month, you will need to lessen your monthly expenses to meet the company’s goal.
#2 Set up checkpoints
Once you have understood the company’s goals and your team’s role in achieving them, it is now time to make a plan. A great way to create a plan is by setting up checkpoints throughout the year to evaluate if you’re on track. For example, if your company is looking to make a €120,000 income, set a checkpoint every quarter to see if the company has achieved at least €30,000. If they haven’t, you still have time to alter your spending patterns before the fiscal year is over.
#3 Check the budget monthly
Between quarterly checkpoints, it is also essential to review the budget on a monthly basis. By doing this, you will be able to have a better understanding of how your monthly expenditure is affecting the yearly budget goals. This will also enable you to identify if one month’s poor numbers are due to a one-off incident or a recurring issue that will need to be addressed. Using spreadsheets is a great way to stay on top of your expenses. Create separate pages for income, expenses and revenue. Track these every month to record your spending and stay accountable.
#4 Keep your team members in the loop
Now that you have a budget to work with, it is time to involve your colleagues in the discussion. By sharing the details of the budget with them, they will be able to understand what they can accomplish with the resources that are available to them. In addition, it will also create a sense of shared ownership and inspire them to find innovative ways to manage the department’s expenses.
Every department needs office supplies to ensure the smooth functioning of tasks. But over time, office supplies can add up to high costs if not monitored or carefully managed. Learn more about how to classify and manage your expenses related to office supplies in our blog here!
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