In many companies, there’s this policy which requires awarded budget that must be spent completely once it’s approved. If the annual spend is below the allocated annual amount, there’s a chance next FY you won’t get the requested budget you asked for.
– why do such policy exist?
Isn’t it better to carry over unused expenses to the next FY? Saving expenses expenditure is a bad thing? Such a policy encourages employees to spend extravagantly the remainder amount nearer to FY-end.
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It’s stupid. I always believed in zero-based budgeting. Yes, you can use the previous year’s budget as a guide, but rushing to spend money just leads to waste. I used to work for a large corporate software reseller and the amount of crap customers/governments would buy just before their fiscal year ended was insane.
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