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How to create a department budget

How to create a department budget
If you are responsible for creating a budget for your own department, you should bear some specific points in mind so as to make sure that yours would be a functional one. It is vital that you should take the requests and demands of your employees into account, so that you could utilize resources available to finish the necessary task effectively. In some companies, employees would be rewarded with prizes or bonuses if the budget is respected in regard to limits and spending possibilities. Here are a few tips you could follow in creating the budget for your department.

1. Know your available funds well.

It is fundamental to have a better understanding of available funds before you are planning to create the budget. By doing so, you should ask the company executives to give you a figure, with which you could work. Having a clear picture of that figure, you would be more realistic about the budget you are going to work out. If not, you might be planning a budget in which that more income would be required than available. However, at the time when you could not be able to get a figure from the company executives, instead you should do some research work to identify the spending habits or patterns of your department.

2. Find out spending outlets.

Instead of allot a large sum for spending; you should create certain categories where your department has to spend money. Therefore, you should go to your employees and coworkers, asking their opinion about what should be included in the budget. For instance, people working with online marketing might need more funding than print marketers. Furthermore, it is necessary for a marketing department to use funding on many items, such as advertising, business events, market research, outsourced marketing help, media and broadcasting as well as creating an online presence.

3. Try to plan ahead.

While it is vital to consider the needs of the employees at the time when the budget is created, it is also important to plan ahead. Instead of considering the immediate needs and wants, you should take the entire year into account in the budget for the department. For example, you have to deal with some equipment that would break down and sometimes you need some immediate replacement for technology rather than waiting for repair. If you could reserve a remarkable amount of funds in the budget, you would be well- prepared for unforeseen emergencies.

4. Keep your budget updated quarterly.

In order to avoid creating a budget which is needed for updating or reviewing just once per year or when necessary, you had better update your department budget quarterly, because some quarters would be more expensive than others. By updating the department budget regularly, you could make some adjustments in the case of an emergency situation when it could be more expensive than the available funds in the budget.

Image source: US News