Controlling a budget
Budget control checklist 5. Understand variances
“Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.” Ayn Rand
Ensure you use the information collated to identify variances from the budget - both positive variances and negative variances. A negative variance suggests you have spent more than forecast, while a positive variance indicates you’ve under spent. It’s important to not assume a positive variance is a good thing - rather, it could be due to a blip, as opposed to a trend, or due to a missing one off payment. Therefore, regardless of the variance, it’s recommended to do a deep dive and explore the root cause of the output.
6. Communicate with the right people
If you notice an issue or a problem, it’s imperative that the information is passed to the correct people so the appropriate action can be taken - after all, as individuals, we may not be aware of issues or potential problems unless informed. If there are variances, discuss with the appropriate people to understand why these have arisen.
Future Practice Owner.
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