Delegating some budget responsibility to your staff, will develop their management effectiveness; they will gain an appreciation of controlling expenditure, an understanding of how it affects bottom line, and an awareness that not all profits should not turn into their wages, they are needed for investment in infrastructure and development of the business. As the business owner you will have confidence that certain aspects of the budget is under control and you will be able to use your time more effectively in other areas.
A monthly line budget forecasts income, expenditure, as well as asset and liability movements. From this budget it is possible to extract and allocate lines of the budget, e.g. an IT Manager could be responsible for the computer hardware and software budgets, while a receptionist could be given responsibility of the stationary budget.
Staff who have budget responsibility, need to be very close to the figures, realistically they should have them memorised. They should be clear about what the figures represent, and where cut backs can be made if necessary. If the business is being affected by the current economic downturn, they may consider proactively cutting back on costs, and thus coming in below budget.
During monthly staff reviews, time should be spent assessing how staff are managing their budget. Remember not all staff are financially savvy, and part of improving their management skills, will be guiding them in monitoring their own budget. Do they understand the expenditure? Do they have ideas how to keep expenditure under control? Do they understand the variances, actual versus budget?