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.
In: 196
It’s not so much a set in stone requirement, as much as a practical reality of budgeting. If the business owner sees one department consistently not spending their full budget, they think that department doesn’t *need* that budget.
Now in large corporations the ones making those decisions are disconnected from actual operations, so they don’t know the broader context of why that budget wasn’t used
Tl;Dr: assholes with business degrees
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