Aligning Integrity And Finance – Business English – October

Aligning Integrity And Finance – It Is Possible

The most common financial mistakes managers make

In many organizations managers are not taught how to manage their budgets. In some cases managers are given budget responsibility but not budget authority. In these organizations it takes 5 levels of signatures to get a few hundred dollars approved. Worst, managers are given both responsibility and accountability but little financial training. As a result, budget forecasts are a guess; managers tend to spend whatever they have, because they are afraid if they don’t, their next quarter budgets will be reduced. Revenue goals or plain budget goals are not based on data from customers or trends; they are simply numbers picked from the sky. If the organization grew 5 % last year then 10 % would be a better goal for this year. The problem with financial projections starts when programs and projects get either overfunded or underfunded based on the initial projections which were not made with financial integrity.