Magazine article Workforce

What Do You Need to Know to Make a Budget?

Magazine article Workforce

What Do You Need to Know to Make a Budget?

Article excerpt

Dear W.W

I have two candidates for a job I am filling. The job requires formulating and handling a sizeable budget.

One candidate strikes me as the overall better candidate, but this person has no budget experience. The other has lots of budget experience, but seems slightly weaker all-around. How highly would you rate budgeting experience?

-Hanging In The Balance

Dear Balance:

Right now you're trying to place a value on the relative skills of these two candidates. But, as you know, there are many ways to value human beings. Take minor league baseball pitcher, Andy Keen, for example. When the Meridien Brakemen decided he was no longer of value to their team, they traded him to the Sioux Falls Canaries for the album "Muddy Waters in London." And who's to say who got the better value?

Selecting among job candidates can make anyone feel like they're fishing in muddy water, but it sounds like you've already spotted your catch: Go with your gut. If your low-experience candidate is strong overall, she'll learn budgeting on the job. Give her the tips below. For more, check out "21 st Century Supervisor" by Humphrey & Stokes (Jossey-Bass, 2000).

Want a crash course in financial management? Most community colleges teach accounting; so do schools online. There's also probably someone in your accounting department who would be willing to serve as a tutor.

Do you find budgeting as exciting as a root canal? I'll admit, I suffer from M.E.G.O. ("my eyes glaze over") when it comes to numbers. But I've learned the way to avoid this syndrome is to play a little game: I look at my budgets and visualize the things the numbers represent. I visualize my staff when I look at the salary column. I see Working Wounded hats and books when I look at the "premium items" column. The more I see the things the numbers represent, the more the budget comes to life.

Can you calculate an ROI? One of the most important, most overlooked tasks for a budgeter is calculating the return on an investment. Instead of just putting something into your budget because you think it's a good idea, quantify the benefits that will accrue as a result of that expense. First, determine the cost of doing business the old way; then figure it again, including the product or service you'd like to ourchase. …

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