I received some very good feedback on two recent postings. The first comment was on the posting entitled "Two Tips on Financial Forecasting." In case you did not read the feedback in the comments section, here they are.
Your comments work for 'big business' too and I found this article interesting and valuable reading. I find the budget setting process to be one of the most difficult phases of the year, particularly for non-financial managers. The time and effort spent at the start of the process certainly pays dividends down the line. The only other thing I can add to your script is - once you've committed a cost to an area of expense don't artificially move it to another area if that line goes over budget. People are afraid of overspending, but unless you show true varianceshow can you accurately budget the next time around? Learn from mistakes and remind yourself of valid reasons for overspending so you can judge whether they are a one-off or the start of apattern/new trend.
I certainly agree that the forecasting principles apply to big business as well. I also agree that expenses need to be allocated properly. It is vital that expenses be shown regardless if you are over budget - or should I say especially if you are over budget. I would like to thank the reader for making those important points.
The second feedback came in an email directly to me from Jim Crawford, owner of Crawford Insurance in Pittsburgh, Pennsylvania. Jim agreed with me on the importance of building a relationship in order to enable your insurance agent to provide the best possible service and advice. As an example, Jim pointed out how an agent can save you money by knowing the working of your business. Here is an excerpt from the email.
Workers Compensation insurance can add up to a large portion of your business insurance expense. Some companies can take a bite out of that expense by forming a workplace safety committee that meets state requirements and by applying for committee certification. This may entitle you to a five percent workers’ compensation premium reduction. More importantly, safety committees are a proven tool in helping keep employees safe, injury free and stay on the job earning their full wages. When I know that a company has the opportunity to save on its premium and keep their workers safe, I frequently work with themto set up their safety committee. A good relationship makes accomplishing this
task easier and more effective.
Pennsylvania business owners can learn more about forming a workplace safety committee and obtaining certification by visiting the Pennsylvania Department of Labor and Industry web site http://www.dli.state.pa.us/. Follow the links to Licenses, Permits & Certifications. From there, you can download the application for initial certification. Most likely other states have similar sites to help business owners in their state.
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