Perhaps everyone who has ever heard about the budgeting process has heard examples of what could best be described as binge spending at the end of the year. The department was given a fixed budget and if it wasn’t used up by the end of the year then the common consensus from the big bosses is that they were given too much and next years budget should be smaller.
I always thought that getting new chairs, monitors or even a new coffee pot in the middle of December were probably not in the best interest of the company but I did like the coffee. Yet, I thought that expenditure was about as crazy as it could get.
Imagine my surprise when I was speaking with my brothers girlfriend. It turns out that the bigger you get the more complicated it gets. At her company all the same types of yearly budgetary magic was performed. The most typical questions is how much money do we have? How much is needed for which projects? Is this a project that is continuing from last year? I also suspect that projects for some people or departments are prioritized over over others – requests for sales vs requests by human resources.
None of what she said really surprised me too much, well, until the budget is approved. Once the budget is approved, the process is still not over. It seems that once the budget is approved they sometimes pick a number out of the air and then shrink budget by that amount. I guess it could be quite traumatizing for the department that received an approved budget for their small projects only to find out that money wasn’t actually forthcoming.
In her company this is a completely separate process so that budgets are approved first and then only some weeks later the departments find out if they really will receive the money. I would have thought that this entire task would have been done as part of a single comprehensive budgeting process.
Nope. Apparently the development department thinks differently than most of management types.