Corporations are multi-layered companies that need proper money management if they are to survive. There are hundreds of theories about forming corporate financial plans. In order to have the best plan, you need to really know your company from the top down. You must learn what your corporation wants, what it wastes and what direction it is heading in order to form the most perfect budget for its situation. Research, meetings and observing various levels of the operations of your company will give you the knowledge you need to make a financial plan that encourages growth and profit.
Study the layout of your corporation. Observe the inner workings of each high-level manager and note the direction they are leading the company in.
Follow the chain of command further and study the middle management. Note how effectively they work and the methods they use to govern the day to day operations of the corporation.
Spend time with the skilled trade and entry level workers. Hear their concerns and watch how smoothly their operations run on a daily basis. Take note of what they have, what they need and what is wasted.
Review corporate policies. Cross reference the policies with your notes. Draw up a budget that provides everything that is needed by the priority of that need. Avoid extras and eliminate spending on items, people and departments that are not forwarding the company towards its goals.
Monitor the company’s progress throughout the year. Have an assistant review weekly, monthly and quarterly reports from everyone in middle and upper management. Require your assistant to write a detailed synopsis of these reports for you to review. Make notes throughout the year using these facts to make your budget decisions for next year.
Review the company from the top to the bottom each year. Look at your notes, the synopsis written by your assistant and refer to the original management reports as necessary to adjust your corporate budget from year to year.
Budgeting the funds of a corporation properly will insure a healthy and growing entity. Mismanaging the funds can lead to lower profits and bankruptcy as well as civil or criminal suits, or even IRS and FCC investigations that could land you and the corporate officers in jail. Always monitor your plan and keep records available for at least 10 years in case of inquiry.
Duke University; How Do CFOs Make Capital Budgeting and Capital Structure Decisions?; John Graham and Campbell Harvey; 2001