May 09
27
The manager who prepares budgets from logical assumptions and then carefully tracks variances and responds is directly involved in making goals happen. This leads directly to higher profits. The manager who is able to put the new budgeting idea into practice will budget more accurately, gain greater control and, to a large extent, will be able to actually control the future.
The idea of “control” in this context should be examined carefully. To some, the corporate version of control translates to procedures and approval; to others, it’s a political influence issue. We mean neither of these when discussing control of the future. The profit-centered manager understands that the future is uncertain; but that with proper budgeting, a range of outcomes can be made to happen. That range is desirable because it leads to corporate profits, healthy cash flow, and realization of goals-not only for the company, but for the staff of the department and the manager personally. Budgeting, when combined with informed leadership and fair treatment of employees, is a valuable tool for creating, maintaining, and even determining levels of profit.
