Budget and Financial Management - button it down

In the perfect world, the head of the company will be like a systems analyst with regard to financial and budget management. This is not always the case as many, through other skill sets and superior skills in diplomacy and marketing themselves, land in the corner office. Unfortunately, some just don’t have the interest or skill set to ponder over the P & L statement every month, and if they don’t, they must find someone who possesses the interest and can summarize the data on one page and offer concise recommendations.

In budgeting, be very conservative in revenue forecasts and overcast expenditures while seeking to stay “under” the forecasted expenditures throughout the year. This practice will ensure that you never have to explain to the board at the end of the FY why you busted your budget.

Speaking of expenses, look for the payback in every expense. You don’t have to be a pathological pessimist, but you have to be ruthless in controlling expenses in every department (especially those that do not bring revenue to the table, leaving room to respond to the unexpected.