Track Actual Versus Budgeted Expenses Closely
Too many businesses look at budgeting as an exercise rather than a financial control mechanism. A budget is designed to guide your business in allocating resources. If actual expenses are not tracked and compared against budgeted expenses, it is nearly impossible to know which managers and which work units are spending according to plan, or close to it. Knowing where actual spending stands relative to budgeted expenses allows a business to make adjustments in spending if necessary. To what extent do you monitor actual versus budgeted expenses?