When a person is promoted to a managerial role, one of the new responsibilities they take on is budget management. This involves tracking the budget of the department they are in charge of to make sure money is spent wisely and not over-budget. While this is standard procedure, the fact is that many new managers receive little to no formal training on the essentials of budgeting.
This makes things more complicated and difficult than they should be, both for the new manager and for the business that assigns this task to them. So, what are a few things that you should do in order to mitigate this oversight in training?
Rather than waiting to make mistakes before learning them, learn to ask questions from your manager or, if possible, your predecessor. There is no better time to ask questions, especially since you’re new to the task.
Asking your predecessor is particularly useful as you will learn all the reasons why things were done a certain way that may not make sense to you at first glance. After all, there’s no sense in reinventing the wheel if everything was working just fine before.
There are aspects of the task that are not readily taught during training sessions. If you can get the previously-mentioned experts to train you, you’re more likely going to be able to handle your tasks properly.
Track Your Expenses
Expense tracking is one of the most basic skills that you need to develop as a manager, even on the rare chance that you have someone else who does it for you. This proactive stance allows you to make corrections even before things take a turn for the worse. Tracking your department’s expenses is not as complicated as it sounds, especially when there are many tools, such as this budget template in Google Sheets, that can help you.
When you involve your team in budgeting, you help them understand the process and this also creates a sense of shared ownership and shared responsibility. In some cases, this may even help you find intuitive ways on how to manage your departmental expenses. This is especially true because there will be aspects of your department that you won’t be able to see so you will have to rely on your team members to put forth any budget-related changes that need to be applied.
Account For The Unknown
Some budgeting guides will encourage you to exaggerate your expenses by simply throwing in an extra 15%. This is a bad idea for many reasons, not just because it’s dishonest in your line of work. While the idea behind it is to help you stay within budget, this is not the correct way to do it. The rationale is sound, but the act itself is wrong. Stay accurate by adding a budget for contingencies and by indicating it clearly in your report. If there’s one thing that should be held in value more than money, it is your reputation.
While it’s true that management entails a lot of responsibilities other than budgeting, the fact remains that it is one of the most essential aspects of the job. Some of you might argue that the information contained within this article may feel like broad strokes, the fact is that there aren’t exact solutions, especially when you consider that there are simply too many factors at play. (such as your relationship with your predecessor, the type of industry you work in, whether you’re the business owner, etc.) there isn’t a cookie cutter solution, but these are the core basics that any manager should establish.