Ask the Accountant: Budgets

Budgets are a very important aspects of business and it is an art form to create a budget that is both realistic and firm in regards to how a business is going to operate for a given period of time. The task of creating a budget takes a lot of time and effort and can lead to a lot of frustration when a budget is rejected or continually revised. In this edition of Ask the Accountant, then I am going to share with you some fool-proof plans to create, get approval for and, ultimately, never have to another budget again.


What is a budget?

A budget is a set of numbers that convey what you want/need to spend your money on during a given period of time. More simply put, it’s an unrealistic goal that will most likely cause you heartache during said period of time when it is quickly realized that the budget that was finally approved by those in charge prevent you from spending any money on electricity, payroll and paper.


If a budget is that impossible to stick to, what is the point of creating a budget?

There is no point other than to give the budget makers extra work to and providing their supervisors a way to justify their seven-figure salary.


I’ve been asked to create a budget for my accounting department this year, any advice?

Creating a budget for an accounting department is, fortunately, a simple task. In general most accountants are underpaid and overworked, which they seem to thrive on. Given this information feel free to reduce your payroll budget so that it is mere pennies over minimum wage. This will free up money for your own salary and bonus while increasing the production that you get from your accounting staff.


That’s very helpful information but shouldn’t I use some of the payroll savings to show my appreciation to the accounting staff via activities outside of the office or lunches?

That’s a very nice suggestion, however, accountants are also used to being underappreciated and overlooked when it comes to activities outside of the office. Introducing your staff to such kindness and appreciation would, I fear, create a strong sense of suspicion and paranoia and they may never leave their cubicles again.
What happens if I go over budget?

Besides being publicly ridiculed and forced to apologize for your failures to your supervisor despite the fact that it was said supervisor’s idea to budget -$1,000,452.03 in expenses for the year in order to impress his/hers supervisor with their plan to make the year the company’s most profitable year ever, not much.


Is there any way to avoid being ridiculed and apologizing to my inept supervisor if I go over budget?

Of course. Blame someone else, particularly your subordinates.


Won’t that make my subordinates dislike me?

No. The fact that they are your subordinates makes them dislike you.


But I’m a nice supervisor! Why would they dislike me?

You get paid more than they do. Plus you eat their lunches from the office refrigerator.


How did you know about that?

Just a hunch.


Every year I spend weeks creating a budget and every year my supervisor changes it to such an extent that none of my data remains in the budget, what should I do?

Unfortunately, this is an all too common occurrence in the corporate world but there is an easy solution. Your supervisor is obviously going to change the budget to their liking so instead of spending weeks creating a good budget just set aside 15 minutes of your time and insert random dollar amounts into each category and then let your supervisor do all of the work of creating the budget.


That’s interesting advice but what if my supervisor approves my budget with the random dollar amounts?

This is a risk, in that most supervisors will use the same exact method when making changes to budgets. If this should happen I suggest you try to get your supervisor fired and use your new-found buget-making skills to get promoted to your newly fired supervisor’s position.
That seems kind of cruel.

That’s not a question.


Out of curiosity, how many budgets have you put together in your career?



None?!? How do you then justify giving other people advice on budgets?

Those who can, do. Those who can’t, make stuff up and either end up in jail or getting promoted to CEO.


Good point but don’t you still find it hard to sleep at night knowing you are giving advice to others on a subject you know nothing about?

I do find it hard to sleep at night due to the fact that my youngest son tends to crawl into my bed at night and proceeds to pummel me with his fists and feet until I’m forced to take shelter under the bed. It’s not comfortable under the bed.






Categories: Accounting, Humor

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