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

As others have already said, this is an FP&A team. Generally every c suite budget owner will have an embedded finance analyst that helps them understand their budgets and reforecast as the year goes on. Public companies tend to have more robust teams as the need for financial forecast accuracy is directly tied to earnings guidance.

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