Skills Required to Agree a Budget
Knowing how to use estimations when developing draft budgets, identifying priorities for budgets, identifying the financial resources are all knowledge one has in order to develop a budget. A budget creator has to possess certain skills in order to agree a budget for specific purposes.
What will you do when you come across a situation where you will have to negotiate on superseded budgets?
You need to possess the skills and know the procedures for doing so. You have come into a situation where you will have to agree a budget for a specific purpose. Can you just go ahead and approve? No, that is not possible unless you have the skills and knowledge regarding budgetary systems.
This article is based on the NVQ Level 3 unit "Agree a Budget."
Please follow the link below for information relating to developing draft budgets, using estimations, identifying priorities while developing a budget, their purpose and benefits which form the first part of this NVQ unit "Agree a Budget."
1.5 Describe Procedures for Negotiating Superseded Budgets
Superseded budgets are budgets that are replaced with a previous / already existing budget. The reason could be ineffectiveness or low quality of the budget or its negative impact on the performance of the organisation, or because changes were implemented or others. When negotiating superseded budgets, there have to be procedures and proper reasoning in place.
- Provide reason for the superseded budget; why this budget is being implemented over the previous one, what are the plus points, etc.
- Investigate, research and provide data on why a project or task has become ineffective with the previous budget, explain its priority.
- Focus on the commitments on this budget, the dependent services, and people involved
- Evaluate and present the merits of the new budget that is going to be put in place
- Show that there will be improved efficiency providing all relevant evidence to back up your statements
- Explain the change in processes and how it will affect the performance in a positive way, also do not fail to mention any negative points here.
- Create a presentation with neat figures and charts that will have a clear picture of the new budget in place and a clear picture of the rise in performance
- Ask questions to the committee involved and listen to their ideas too; this is very important and helps you to gain / exchange information
1.6 Describe Skills Needed for Agreeing Budgets
Agreeing budgets involves money; so one has to possess the skills, behaviour, knowledge and understanding about budgets and how the organisation works, in order to agree budgets.
Business Budget Plan
Some of the skills needed to agree budgets are:
First of all a thorough knowledge of budgetary systems:
- Understanding the purpose of the budget
- Knowledge on discussing, negotiating and confirming budgets with people who are in charge of finances
- Variations that may arise in budgets and ways to identify them
- Revising budgets, reasons to do so and communicating this information accurately and promptly to the relevant people
- Monitoring and controlling the performance of tasks that depend on a particular budget
- The policies, regulations, guidelines and procedures for preparing, monitoring, revising and agreeing budgets
- Operational plans for the area where budget is being agreed
- Authoritative limits
- Emergency contacts in times of urgent needs
Professional skills that are required are:
- Ability to gather information from various sources for implementation of budget and also use it as a lesson for future budget plans
- Evaluate the information available, take ideas from relevant people and prepare an efficient budget depending on tasks or projects it is to be assigned for
- Submit the developed budget and have discussions where necessary; also negotiate with relevant people where necessary before finally agreeing the budget
- Monitoring the performance of the task / project throughout its entire length
- Discuss with relevant people and prepare necessary documents when variations need to be agreed in the middle of a task / project
- Confirm the budget with the people involved in the process; provide them with updates all along the length of the project
- Know what to talk to financial authorities when questioned on the budget.
- Have planning and control skills and excellent coordination skills to put things together and to bring the team to a particular agreement
Behavioural skills required to agree a budget:
- Ability to be fair
- Be consistent during the decision making process
- Look for legitimacy in requests and learn to disagree budgeting for those tasks
- Be on alert and always ready to respond and provide alternative advice / budget during crisis situations
- Ability to present information in a clear, accurate and concise manner
- Be a clear and effective communicator
- Be proactive and assertive, have good attitude, motivation and be disciplined
- Be patient and work with plenty of time as budgets developed or agreed in haste will go wrong
- Possess excellent logical skills
- Stay within your own authoritative limits.
2. Be Able to Agree a Budget
The second part of this unit requires you to
2.1 Identify financial resources needed to achieve goals and objectives for agreeing a budget.
2.2 Evaluate and justify costs and risks.
2.3 Prepare a draft budget.
2.4 Negotiate and agree a budget.
Hence you will be assessed based on observation, professional discussions, question and answers, workplace evidences, personal statements and witness testimonies. You should be able to agree a budget within the area that you deal with and within your authoritative limits. In that process, you should
- Have knowledge and be able to identify all the financial resources needed to achieve goals and objectives for agreeing a budget. You will be asked why you chose a particular resource, how you knew about it or identified it, etc. Minutes of meetings can be used as evidence here
- Be able to evaluate and justify costs and risks; you may be asked questions on why you chose to work this in a particular way, its advantages etc. Meetings held and reports / minutes from meetings can be used as evidences.
- Prepare a draft budget; follow the normal procedures of drafting a budget and your assessor will be observing this. You can also provide evidences of previous draft budgets that you had developed and explain it. You may be asked questions based on what you provide
- You should be able to negotiate and agree a budget; this will be based on observations followed by a professional discussion + questions and answers. You may be asked for reasons for negotiating, and other information about the budget that you agreed
I hope you find the information here useful. Please do not hesitate to drop your ideas and suggestions if you have any.
Thank you for stopping by. All the best!