What happens after you set your budget? |
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Caddie Consulting visited a client in November of 2003 and discussed their budget process. All department managers were required to issue budgets to upper management before Thanksgiving and they were reviewed at the 2004 Planning Meeting (actual man hours spent could not be calculated). I asked to see the prior year budget and the President took it out of the bottom drawer. I was told it was put there at the end of the Planning Meeting and has not been seen since. I then compared the prior year budget to the actual results for the first 3 quarters of the current year. The results were not what the President was hoping to hear. Revenue was just below their projections, but costs were well above expectations. All of the gains from increased revenue were offset by unexpected increased costs. Caddie Consulting then compiled the 2005 budget in November after the Planning Meeting and reported the results to upper management. After January’s financial results were completed, we compared the monthly results to the budget figures and to the same period in the prior year. Any unfavorable budget line item results were analyzed and reviewed with the appropriate department manager. As the department managers soon realized, costs were being closely monitored and they would be held accountable for their budgets. This resulted in reduced costs and any foreseen cost overruns needed prior approval. After the first 3 quarters of 2005, the President admitted this was the first year that results mirrored the budget. Their bank was also impressed with the results and could not wait to review the company’s budgets annually.
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· Analyze your financial statements for 2007 and 2006 · Review cost saving opportunities per review of those financial statements and discussion with management · Complete your 2008 budget based on those discussions · Develop monthly management reports which analyze your current financial results with the prior year and your budget · Present these reports to management so timely and informed decisions can be made to improve your bottom line
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BUDGETS AND ANALYSIS |
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Let us carry your bags while you concentrate on the money shot |
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Let us carry your bags while you concentrate on the money shot |
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Caddie Consulting |
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Bridging the gap between owners and their accounting departments |
What we can do for you |
