JWI 530 SU Wk 10 Financial Management Annual Budget Processes Discussion

Budgeting

Describe your company’s annual budget process.

What is your involvement in the process?

I was partially involved in our budget as shop foreman. I would advise our fleet manager on the accounts that mostly pertained to my side which is production. We monitored our budget to make sure we did not go over. Unfortunately, this was not the case in some instances, and we would do budget transfers to cover for the rest of the year.

Our Fleet Manager was in charge of inputting the numbers as he saw fit. Now I am Interim Fleet Manager and will be taking care of the budget from beginning to end. Once we complete our budget than our finance analyst will oversee it and provide feedback before it goes to the finance board and ultimately to the city manager and commissioners for approval.

What works well? What doesn’t work?

I think that the budget can go pretty smooth and forecasting can be some what challenging but It all works out at the end. I think that the biggest challenge we face Is the Finance Director; she can be very difficult and most of the time does not accept our increases and explanations for adding more to our budget. This creates big problems because then we are made to cut our budget drastically and end up with shortages close the end of the fiscal year.

If you were CEO/CFO, what changes would you make and why?

The biggest change I would make is with the Finance Department by making sure that they are more lenient and allow for managers and our finance analyst to budget adequately.

How would you communicate to employees the value that the process brings to the business?

I think that involving your team by providing a summary of the budget can help them understand how important it is for them to produce. Allowing them to be a part and letting them know how much was budgeted for the year can help each staff member understand how important the budget is when they ask for a request that in volves money and we are not able to give them what is requested. It also allows them to understand that they can help our department by keeping up the production and or labor hours which in our case equals money for our department.

References

1. Ittelson, T. (2020). Financial Statements, Third Edition. Career Press, ISBN: 978-1-63265-175-4.
2. Siciliano G. (2014). Finance for Nonfinancial Managers, 2nd edition. McGraw Hill Education, ISBN:978-0-07-182436-1.
3. Welch, J. & Welch, S. (2015). The Real-Life MBA. HarperCollins, ISBN: 978-0-06-236280-3.

Good Afternoon Professor Miller and Classmates:

Budgeting

Describe your company’s annual budget process.

Listening to Jack’s video I think the process models what he described (1). The budgeting process for our company is largely formatted by the Finance department. The data from the year prior is used as the template for the next year’s budget. The managers have access to the information prior to their budgeting meeting. This is their opportunity to look at their variances and give suggestions for the coming year. After the meeting with finance, the budget is reviewed by the hospital president and he makes the final decision.

• What is your involvement in the process?

In my previous job role, I was a business partner to the department leader. I assisted five (5) department managers. I oversaw payroll, supply ordering, and travel arrangements. I attended the meetings to answer any questions they had if things were over the budgeted amount. I was able to give my input if I felt it would be an ongoing issue that needed to be reflected in the budget for the next year.

• What works well? What doesn’t work?

In my opinion, the process does not give the manager the power to make major changes if they deem them necessary. The final decision is made by our hospital president. I think the process has a lot of things that are right. They use a software system, because of the way information is compiled it’s honest, one section of the budget covers hardware that may be needed like computers (2).

• If you were CEO/CFO, what changes would you make and why?

If I were CEO/CFO I would give the managers a little more freedom with their budget. If they don’t meet the goals, they set I would trust them to have a good reason why and allow them to take finances from another area if possible.

• How would you communicate to employees the value that the process brings to the business?

First, I would have meetings with the leaders to discuss my expectations. Second, I would trust my managers to communicate this information to their teams. The team members need to know that they play an important part in the budgeting by making sure they use the supplies responsibly and they are good stewards of their time (avoiding overtime when possible).

Regards,

Tiffany

Source:

1. Welch, Jack. (2020). “Operating Budgets: Stop the Gaming.” Experts of Practice video
2. Yvanovich, Rick. (March 1, 2012). “6 Steps to Improving the Budgeting and Planning Process.” https://blog.trginternational.com/bid/126869/6-Steps-to-Improving-the-Budgeting-and-Planning-Process