Budget Interview

This week I interviewed Ray Weber, CFO of First American Title. I learned that budgeting can be very difficult and it was interesting talking with someone not in the healthcare field. I also realized how complex some budgets can be, especially the one we worked with from a unit in the hospital. A title company definitely has different expenses and actually a lot less things to budget for. Going over budget can sometimes mean good things, in this case specifically.

1. In what areas does your department/company overspend when looking at your budget?

Our office specifically usually overspends on office supplies each month.

2. Which expenses do you most often adjust if you are over budget?

We generally don’t cut expenses back. Our profit margin that month is just decreased. We have a budget for a few things and cutting back on client lunches will lose business, cutting back on office supplies generally isn’t an option, and rent and phone bills are set. If we are having to spend more on office supplies, generally it means we are doing more business to in the long run we are making more money.

3. Are there certain months during the year the company overspends? Is there a pattern?     

Spring, Summer, and Fall are our busiest seasons so we try to anticipate the expenses but we can’t always predict the market.

4. If you don’t meet budget a certain amount of times, what kind of consequences are there?

Generally it isn’t a big deal because it is seasonal and we will make up for it. If it gets really bad an employee may be furlowed.

5. Do you have a range for a budget? Or is it a set number that you work with?

Some are set (rent, bills) others we are given a range and try to stay within that.

6. What about a range for certain areas in your budget?

Office supplies ranges from $1,000-$1,500 per month.

7. If you are over budget, what do you do? And how do you decide what gets cut?

Employees may get furlowed, we analyze what areas were over budget and see if we can change that. However, like I mentioned before, if we are over budget, it generally means we are actually having more business.

8. What do you find to be the most difficult thing associated with making/adjusting the budget?

The most difficult thing is deciding what areas to make cuts in and how much to cut. It is difficult to know what effect that will have sometimes. I try to make the necessary cuts so we don’t have to furlow someone; people are more important.

9. Are you generally able to keep within your monthly/yearly proposed budget?

Yes.

10. What process do you need to go through to increase the budget for the department?

All expenses are approved along the way. We generally don’t need approval from anyone else to make some changes to our monthly/yearly budget.