Who Owns This Number?

Preparing a budget requires us to make assumptions about the future. Who is best able to make these assumptions? Who knows the most about what causes revenue or expense to increase or decrease? This person is the one we should ask about the assumptions being made in the budget. This is also the person who should be held accountable for achieving the budget for this number. The salesperson owns the revenue number. The credit department owns the bad debt number.

For each number on the budget, you should know who owns that number. During 2020 we found out there were expenses not in the budget for COVID-19. Who should have seen that coming? We will never get these assumptions right all the time as no one predicts the future with 100% success.

A budget is used to motivate people and to judge performance. It is helpful to know who specifically we are attempting to motivate and judge, that is who owns the number.

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Painless Financial Training Group Inc. with Debi Peverill

Understand Financial Stuff, Painlessly