[b]Bottom-line:[/b] Any helpful references to managing budgets for a first timer? I'd also like to learn how to plan this out for a few years. I found one post recommending "Managing by the Numbers" under the here. Right now, I'm not setting the budget (though that could be useful to know) but trying to manage to what I'm given.

As some background, my company is finally giving managers their own budgets. (My company does software development.) I had some input into what I would like to see for different areas. Eventually, I've been told I'll get some numbers back. But I'm not invited to the process of figuring that out. I read one post talking about planning out for growth for 3-5 years. I'd love to be learning how to do that too.

I realize a lot of the costs are fixed - salaries, our tithe for HR & building expenses, etc. We also have fixed policies about equipment replacement and that is automatically added to my budget. But my team is split across 4 geographies. I've asked for money for travel, an annual team meeting, software tools to do the job, training, etc. I don't know what I'll get but I'll have to work within it since I don't have a choice!

I listened to the "Race don't chase" and really like that idea. My boss confesses that he did a budget for the first time two years ago. My observation is that he doesn't know at any time how what expenses are, income is, etc. (This is from putting in a request for something that was budgeted and he said he'd have to figure out if we had money.) When I asked at one time, he confessed that he'd never been taught how to do this. He had two groups and the budget was really just a big pool to him. So...if you asked at a time he thought he had money, you got it! In August this year, he came back and said he "discovered" he had more money and we needed to figure out how to spend it because if he didn't he wouldn't get as much next year.

I'd also like to know how you make this into a long term plan - not a rush at the end of each year. I'd guess my boss will be no help here either. I think that because I tried to talk about planning for raises for a few people. Some of my staff may be ready this year...another I'm thinking the following year...and so on. His response was that he didn't know how to do that.

My peers obviously had never done them before because budgets were all done at the higher level. You had a "spending authority". But basically you had to ask your boss any time anyone wanted anything.

So...any advice on good reference material?

jhack's picture


I assume you’ve read:

and Mark’s advice in this thread:

Do you have a copy of the budget spreadsheet from the last year? Do you budget by month or by annual totals?

Do you have access to the actual spending against those budget items? Can you get that in a timely fashion?

The best way to do long term planning is to keep your current budget up to date (set aside time each month), and extend it out one year. Since most of your expenditures are predictable, you can easily extend it out (adding some assumptions about growth). So by the time they come around and ask for your budget, you have it already done.


tlhausmann's picture
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I would add that it is helpful for you to know your industry benchmarks. Also plan out at least three years of future expenditures...preferably five.

In my industry there are annual surveys for which I can turn to see how my expenditures line up to industry metrics.

jason_koch's picture
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Hi Jhack / Mssunshine,

Did you have any recommendations you can share from this? I'm going through a similar process of taking over the unit's budget & forecasts however I'm building some of the spreadsheets from scratch.

I've clicked through to the links you've shared Ms however they show a page not found - probably the site has changed a bit since then.