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