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42 Understanding Budgets Managing Budgets At this point in the fiscal year, how much has actually been spent With a bit more analysis, we can also figure out: If we are on-target as far as where we should be in the year for revenues If our estimates of where our expenses should be were accurate Where we might have some concerns because we are not on-target 7.2.2 Questions We Might Ask
Now let’s take a closer look at what the information in the budget might prompt us to ask about what is
going on in the business. For example, on the income side: Our FY11 projected actual for sales is lower than what we budgeted for the year. What has
happened that accounts for the difference? Do we need to ramp up marketing efforts? Is there a
sale or event that we need to have in order to up the sales to where we need them to be? What
would these decisions do to our budgeted marketing expenses? The projected fees for the year are above where we needed to be for the budget to be met. Does
that mean we can relax a bit about not having met the sales goal for this year so far? Does having
a different mix of revenues than we budgeted for have an impact on any other operating costs? For
example, if fees come from intensive one-on-one consulting, we might have to pay for high-level
consultants at a cost we weren’t counting on. Let’s assume that our interest income is down from where we budgeted because of the economy.
Is that a sign that we might face other revenue difficulties? Do we need to adjust our investment
strategy? Why aren’t the reserves at the point where we thought they would be by this time in the year?
Have we had unexpected expenses? On the expenses side, we can see that there are some fixed costs that we budgeted accurately because of
the fact that we knew the amount wouldn’t change during the year. Of course, this assumes that items like
rent, utilities, and in...
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