| The question of 'Should the financial budget | | | | to produce a budget that is closes to reality. |
| preparation solely be the responsibility of the finance | | | | The rationale for this is simple and there are so many |
| manager?' has been debated over and over again by | | | | good benefits that can be derived from this method |
| senior managements of many corporations. The | | | | of budget preparation. Some of the good benefits |
| objective is to identity which is the best and most | | | | are as follows: |
| efficient way to prepare budgets. Preparing budget is | | | | 1. The non-finance staff who is directly involved with |
| usually done at least once a year. Certain big | | | | the financial transactions can prepare better budget |
| corporations perform interim budgeting within the | | | | on his areas of expertise compare to a finance |
| year. | | | | manager who is not. |
| If you post this question to a non-finance manager, | | | | 2. The non-finance staff will pick some finance |
| he would most probably say yes without hesitation. | | | | knowledge and budgeting skills in the process of |
| The most common argument given is that 'he is not | | | | preparing the budget. History shows that such |
| a finance guy and is not good with figures'. | | | | knowledge and skills can make the non-finance |
| However, if you post the same question to a finance | | | | manager more competent in his job. |
| manager, he would probably say no. His argument | | | | 3. Problematic operational issues are easier to solve |
| would be that the respective line managers who are | | | | when they are translated into figures. You would be |
| directly involved with the financial transactions, are | | | | able to make a better decision by looking at the |
| best people to give an accurate budget for his areas. | | | | figures. This is especially true when dealing with high |
| From the management's points of view, both reasons | | | | expenditure items such as software, hardware, |
| are valid. This complicate matters and causes decision | | | | equipments, motor vehicles and etc. |
| making very tough. | | | | 4. It saves time when both finance and non-finance |
| From my years of experience preparing budgets, the | | | | staff work together rather than both of them work |
| best way of preparing budgets is to get both the | | | | individually and separately. |
| finance and non-finance managers to work together | | | | |