The first step to be taken before any budgetary control can effectively take place is to have a business plan detailing what your plans for the business actually are.
Budgetary control as a term gives a suggestion of the business being controlled within a very tightly defined area, but we all know that business is dynamic, flexible, often unpredictable, and so the systems we operate in business must be capable of coping with the stresses and strains of the environment in which we operate. Budgets should not be viewed or operated as a brake to the organisation, but must be enablers that drive the business forward. We attach a case study here on Dynamic Budgetary Control showing the benefits of such a system we developed and operated in practice.
Budgeting should not be confined to financial aspects of the business, but should be derived from the business plan and show the plan in detailed financial and non financial terms. For control and accountability purposes it is likely to contain performance measures and Key Performance Indicators (KPI’s) throughout the planning period, so an annual budget may contain daily, weekly and monthly information to ensure that progress can be monitored and reviewed at appropriate time intervals.
Watts Associates have worked with many organisations to develop budgetary control and management reporting systems, designed to meet their specific requirements. These systems ensure that variations from plan are identified at an early stage, in particular so that adverse variations can be addressed.
For an initial discussion call George Watts on 01302 842831 or use our contact page