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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They don’t, that’s not really how things work.
Instead, money is spent as it’s needed, they don’t allocate an exact amount at the beginning of the year or anything.
But they get the monthly spending statements, so if they notice an office is spending A LOT of money in the previous month, there would be a bit of an investigation as to WHY, and they could alter things if needed.
They also typically prevent drastically going over budget by requiring large purchases to get approved by higher ups at the company.
But like, I have a corporate credit card, and I do not have any instructions on how much I should spend on it, I am just given it to by things whenever necessary, and I just need to keep receipts for anything over $25. But one months I could spend thousands on it, and the next month spend nothing, all based on what’s needed for projects and the office.
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