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

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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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Anonymous 0 Comments

I can only speak for when I worked for Volkswagen. We would be under budget every quarter and then start buying a bunch of expensive plants for the office and similar to fill up the budget. We absolutely did not want to remain under budget as that would mean a budget cut for the future. So we literally wasted it all on buying useless shit.

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