Eli5: Budget surplus
In: Economics
It’s leftover money at the end of a budget period. If a company department has a $1m budget for employee salaries, office/computer equipment, training, outside vendors, etc. and only spends $950k, then they have a $50k budget surplus.
Now that’s not always a good thing… if management sees that, they may decide to cut the budget the following year to $950k, when the department might still need another employee, or needs to upgrade their computers, etc. so you’ll often see those overseeing budgets try to spend up to their budget if at all possible to reduce likelihood of cuts and/or inability to spend on necessary expenses in the future. Better to upgrade all your employees computers and reduce budget surplus than not have the money to do so next year.
Latest Answers