10. November 2016 |

Hokus, Pokus: Fokus!

Budget, Controlling & actual to target comparisons, Part 2.


South America is a captivating country – you now have collected tons of impressions, climbed Machu Picchu, seen the salt flats of Uyuni and went down the “Death Road” by bike starting in La Paz. But most important you have not left your initial route, because you knew you can only reach so much within the given time and budget.

Monitoring at a glance

Now we have reached the controlling level and target-to actual comparisons level. You have created your budget along with your department heads, formulated a commitment to achieve the goals and start motivated and enthusiastic in the new fiscal year. This time you will prepare all documents every month for the accountant – but with one major difference: you can´t wait to see the monthly balance sheet. Curious you will compare the budget with the results in the balance sheet. Now you are able to see deviations timely and are able to react promptly.

The comparison-sheet is the secret to success

What you missing now is a simple overview, a comparison between those numbers that you have budgeted jointly with your team with the current numbers that you received from your accounting. Our recommendation on this issue: an Excel workbook that has exactly the same structure as the lists of the financial statement, that you receive from your accountant.

And as simple as that:

  1. Request the balance-sheet as an Excel document from your accountant, then you can save yourself the tedious input (and we all know how time-consuming this can be).
  2. Create a workbook with a sheet containing the monthly actual figures, which you receive from your accountant. Include the budget as a separate sheet in the workbook.
  3. Open another sheet and both sets of figures together. (The actual figures with the DESIRED = budgeted figures). Now you get a monthly comparison, which you can then use for further steps.

5 helpful tips for you

  • Never change the budget during the year
  • Create regular target-performance comparisons
  • Analyze the deviations
  • Take action and keep steering to your business
  • Praise your employees when achieving departmental objectives – Motivation is everything!

For a successful development of your business, we would like to encourage you with these remarks and help you create your budget carefully and evaluate your target to actual comparisons continuously. Only if you focused, you and your employees will know, where the journey will go.

Yours, Alexandra Truppe

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