Managing with Budgets

Once prepared and in operation, the budget becomes one of the manager’s regularly used tools. The previous month’s actual sales and expenses come back from the accounting department by the middle of the present month. All figures that are over budget are marked for attention. Some of the accounts that are over budget are understandable; the manager knows the reason and either accepts it or knows that the matter will be corrected ill the near future. If there are others which are significantly over budget and the manager does not know why, he will investigate the overage and take corrective action if necessary.