| Managing money is a key part of your role as a | | | | develop the right skills to manage your budgets. |
| manager so what mistakes must you avoid if you | | | | Mistake 3: Not setting expectations |
| are to be an effective budget manager? | | | | Managers often devolve the management of a whole |
| If you are a manager then chances are that one of | | | | budget or part of a budget to another more junior |
| your responsibilities will be managing one or more | | | | manager. While this is excellent for growth and |
| budgets. Surprisingly many managers struggle when | | | | development, it is vital that you make it clear to |
| it comes to managing budgets even though this is | | | | them what your expectations and what you are |
| something that they have to do in their everyday | | | | holding them accountable for. |
| life. So what are the common mistakes managers | | | | Mistake 4: Relying on historical information |
| make when it comes to managing budgets and how | | | | The Finance team will provide financial information |
| can you avoid them? | | | | following the end of each month. Trouble is that it |
| Mistake 1: Not getting involved in setting budgets | | | | can be up to 5-6 weeks after the event when you |
| If you are going to have any chance of effectively | | | | made the decision to spend or generate revenues in |
| managing a budget, it is important that you are fully | | | | a new way. It is therefore vital to set up systems |
| involved in setting the budget. It is all too easy to | | | | for your key income and expenditure areas that are |
| fall into the trap that your accountant will take care | | | | as close to real time as possible. |
| of it. Trouble is they do not understand your area | | | | Mistake 5: Not taking action quickly enough |
| of the business, what drive revenues and costs and | | | | If things are off track and you know that it is just a |
| how to increase profits as well as you do. Make | | | | temporary blip then careful monitoring is what |
| sure that you are driving the budget setting process. | | | | matters. If on the other hand you know that the |
| Mistake 2: Not acquiring the right skills | | | | performance dip is not a one-off, you need to take |
| There is no need to become an expert in Finance but | | | | action quickly before things get out of hand. While |
| you need to have a good understanding of setting | | | | this might be uncomfortable, it is much easier to |
| budgets, variance investigation and what to do if | | | | tackle challenges when they are the size of a |
| things are not going according to plan. Many larger | | | | snowball rather than an avalanche. |
| organisations have in-house programmes in-house on | | | | Managing money is a key part of your role as a |
| Finance for Non Financial Managers and if not there | | | | manager and by taking control you can become a |
| are many external short courses available. No | | | | highly effective budget manager. |
| matter how you acquire them, make sure that you | | | | |