6 Budget Tips Every New Manager Must Know
6 Budget tips every new manager must know. At its most basic level, a budget ensures that a team or department has the resources needed to achieve its goals.
For managers in a company, the budget serves as a vital tool for:
- Communicating expectations and goals to stakeholders
- Mobilizing teams and departments around organizational objectives
- Assessing group and individual performance
- Gaining insight into an organization’s financial health
- Allocating resources strategically and appropriately
If you want to reap the benefits of these techniques, here are six budgeting tips you can employ to become a better manager and advance your career.
1. Know Your Organization’s Budgeting Timeline and Procedures
Familiarize yourself with your organization’s budgeting deadlines and procedures at the outset of the process. Your numbers may be reliant on financial targets set by your supervisor and other department heads. Knowing when specific deliverables are due will help ensure you effectively manage your time and connect with stakeholders who can inform your allocation decisions.
2. Leverage Financial Data
In addition to connecting with stakeholders, leverage existing financial data in your decision-making process. By analyzing financial statements, such as the balance sheet, income statement, and statement of cash flows, you can gain insight into your organization’s financial health and performance, and determine how to suitably apportion resources.
3. Work Toward Goals
Understanding your organization’s goals is vital to successful budgeting. This knowledge can enable you to develop a clear picture of how your team’s work fits into the company’s key objectives and advances its overarching mission. For example, your firm may be planning an important organizational change initiative, such as a redesign of its website. As part of this process, your team will be responsible for writing web copy, creating videos, and designing graphics. With these requirements in mind, you can break your team’s work down into specific deliverables and line items within your budget, accounting for all the resources your employees will need to produce the desired results and push the project through to completion.
4. Evaluate Performance
By preparing your budget with your organization’s mission in mind and a detailed set of deliverables, you can develop a roadmap for evaluating performance once the fiscal year is underway. Keep track of expenses so you can compare your spending against projected costs, and stay in close contact with other stakeholders within your organization to ensure your team’s timeline for completing work is in sync with company-wide project plans. The deliverables in your budget can serve as key milestones that inform how you manage your employees’ time and deliver feedback on their contributions. If a particular task is at risk of not being completed or incurring additional costs, be prepared to modify line item amounts and delivery dates, and consider strategies you can employ to realign your team and improve performance.
Maintain this kind of flexibility throughout the budget management process. Unexpected circumstances can arise, so be ready to reallocate resources when necessary to ensure your organization is well-positioned to achieve its goals.
5. Communicate Progress and Results
Clear and consistent communication is crucial when overseeing a budget, as your team’s work is typically just one element within a larger network of moving parts. Establish a regular cadence for meeting with key stakeholders to report your employees’ contributions and results. Use data visualization techniques to illustrate your team’s progress, and make it a point to highlight any accomplishments or shortcomings that could have implications that extend beyond your direct reports. Carve out time to update your employees as well. Keeping them apprised of the impact of their work can help them feel more engaged and motivated.
6. Hone Your Financial Knowledge and Skills
Bolstering your financial knowledge and skills can pay dividends when it comes to budgeting. By advancing your education through such avenues as an MBA program or online finance course, you can broaden your understanding of key financial terms and concepts, enabling you to better communicate with finance and accounting professionals within your company and identify ways to create value when preparing your budget.
Matt.Gavin Harvard Business School
