Holding useful discussions
Holding focussed discussions can be extremely useful when making decisions about budgetary improvements. To improve a budget’s performance, you should aim to discuss the budget’s outcomes with the same personnel that you discussed budget priorities with. Holding discussions with these personnel will help to inform all major financial decision makers, reach decisions, make the most of people’s knowledge and experience, and develop ideas.
Effective discussions require you to:
➢ Value everyone’s opinions
o you may not agree with your colleagues, but you should learn to encourage and accept all views despite this
➢ Involve the correct people
o based on position within the organisation, knowledge, and experience
➢ Communicate clearly
o using both verbal and non-verbal
communication
➢ Compromise when necessary
➢ Use active listening techniques
o listen, clarify, and confirm
➢ Be open-minded to new ideas and points of view
➢ Trust your colleagues.
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Discussing budget outcomes
You should look to discuss the following questions with the appropriate members of your team.
What is the budget supposed to achieve?
You will have already discussed budget priorities with your colleagues, so all personnel should be clear about why specific budgets exist. For example, you may have created a budget to help improve financial control within a specific department.
All budget goals and objectives should be reiterated to make sure everyone is clear what they are.
Is the budget achieving what it is meant to?
You should discuss whether the budget you have in place is helping to control finances. If it is not and you conclude that estimated income and expenditure figures are incorrect, you will need to discuss why that is. For example, it may because of a one-off unforeseen event – such as a natural disaster – or it may be because of continued wastage in certain departments.
What action needs to be taken if budgets are not achieving what they are supposed to?
You will need to discuss and establish reactive protocols for adjusting and improving budgets when they are not helping to control finances. For example, you should clarify when a reassessment of costs needs to be carried out, and when income and expenditure estimates need to be adjusted.
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Activity 3B
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3.3 – Undertake appropriate research to investigate new approaches to budget management
Researching new approaches
Researching new approaches to budget management is an essential step when working to improve budgets.
Research can take many forms, which may include some of the following.
What do competitors do?
Often, a useful research method is to look at how your competitors approach budget management. If this is not possible, look at publically available examples of how successful companies in your industry control their finances.
Pay close attention to how they prepare, discuss, monitor, and adapt their budgets, according to what type of budget it is and what its purpose is (e.g. to control finances while developing a new product).
Consulting experts and colleagues with more experience
Research can also be carried out by consulting financial experts – such as accountants – or colleagues that have more experience of managing finances and budgets. These parties may be able to tell you where you are making mistakes, or offer useful insights about how to control budgets.
Researching accepted theories
Another option for undertaking research is to read/watch/listen to learning materials which examine proven financial management theories and approaches, and why they work. You should make sure you get your information from a variety of trusted sources, and critically evaluate whether any approaches or strategies are likely to work for your organisation before implementing them.
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