Agree a Budget – Skills required

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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What will you do when you come across a situation where you will have to negotiate on superseded budgets?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 hub is based on the NVQ Level 3 unit "Agree a Budget."

Please follow the link below on 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."

Agree a Budget – Use Estimations, Identify Priorities and Financial Resources, their Purpose and Benefits

1.5 Describe procedures for negotiating superseded budgets.

Superseded budgets are budgets that are replaced with a previous / already existing budget.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 When negotiating superseded budgets, there have to be procedures and proper reasoning in place.

  • Provide reason for the superseded budget; why this budget is being implemented over the previous one, what are the plus points, etc.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.

The business budgeting process

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

Please follow the link below on 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."

Agree a Budget – Use Estimations, Identify Priorities and Financial Resources, their Purpose and Benefits

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!

Livingsta

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Comments 8 comments

livingsta profile image

livingsta 11 months ago from United Kingdom Author

Hello kidscrafts,

Hope you are well. I am so sorry for the delay in responding to your comment. I have been caught up with a lot happening personally and trying to catch up with everything.

I am so glad that you stopped by and shared your experience on this. I agree that we have softwares that automate everything these days, but a good knowledge of what actually is done by the software is very important. Many many thanks for your continued support here. Hope you are having an awesome 2016!


kidscrafts profile image

kidscrafts 3 years ago from Ottawa, Canada

I remember that I took a economic class when I was studying to be a teacher; boy did I hate that subject! Some of the course was interesting but I didn't understand the logic with the columns and the names. I could balance my budget very well without having to use that system. My husband and I were just married and had almost no money... so no other choice than balance our little budget!

I am happy now that we have programs where you can just enter those numbers and the computer does the rest :-)

But anyway, it's very important to have enough knowledge about balancing a budget even if you have program to enter all the numbers!

Great hub, with information very well organized, Dahlia! Very useful and interesting!


livingsta profile image

livingsta 3 years ago from United Kingdom Author

Hi Cris, thank you. I am glad that you found this interesting. Thank you for stopping by and sharing your thoughts and experiences :-)

Have a good weekend!


livingsta profile image

livingsta 3 years ago from United Kingdom Author

Hi FlourishAnyway, yes it is. Thank you for stopping by and sharing your thoughts :-) Have a good weekend!


CrisSp profile image

CrisSp 3 years ago from Sky Is The Limit Adventure

Budgeting! I used to dread that subject but I've learned from my mistakes. :) I like your approach in here. Very useful, practical hub.

Surely passing this to my daughter who's now gone to the Univ and living on her own at the Univ residence. She's actually good in budgeting and if I may confess, a lot smarter than mommy. :) But hey, this is really a good article and well presented.

Thank you.


FlourishAnyway profile image

FlourishAnyway 3 years ago from USA

Whether as a project manager in the workplace or in the home, budgeting is a key skill.


livingsta profile image

livingsta 3 years ago from United Kingdom Author

Bill, thank you for reading and sharing your experience. Sending you blessings and a hug my friend :-)


billybuc profile image

billybuc 3 years ago from Olympia, WA

Very useful information, Dahlia. I had to learn to budget a long, long time ago. With limited funds it is mandatory for survival. :)

blessings and a hug coming your way

bill

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