eli5 How do companies spend their exact budget without going too over/under?

Question

So most companies have a big corporate office and a bunch of regional offices that they allocate money to, I get that. Let’s say a given office gets a $500,000/yr operating budget (just throwing out a random number). How do they spend exactly $500,000? Because they obviously don’t want to go over budget but they don’t want to have a surplus and lose $ next year. So is there wiggle room? Would they spend $499,995 or something?

In: 485

Answer 1

When the end of the year approaches and you have too much left, spend it on complete bs to ensure you get the same amount next year.