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?
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At the end of the budget year, we are either prohibited from buying even a single box of paper clips, or are asked to buy computer monitors that are stashed in the closet because otherwise we’ll lose the money next year. “Buy in bulk” means saving up orders until there are enough to get a volume discount… unfortunately, we can’t anticipate that we were going to run out of disk space due to unprecedented disk use, and needed to wait 18 months for upgraded disk discounts (no pun intended), so we were vulnerable to loss for that long.
IMHO, this type of financial management is a waste of time & energy. Replace “spend it or lose it” with needs-based budgeting that can borrow against next year’s budget. Returning money to the pool should be viewed as a good thing.
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