THE IMPORTANCE OF BUDGETING - Home | MSU …

1 THE IMPORTANCEOF BUDGETINGG eorgePrieskorn,GeneralManagerBurroughsFa rms,Brighton,MichiganIn talkingaboutthe importanceof BUDGETING ,one must firstdiscusstheproperproceduresin developinga good is one of the basicresponsibilitiesof a golf coursesuperintendenttopreparethe annualgolf coursemaintenanceor is hard tobelievethat the operatingbudgetcouldoriginatefrom any otherindividualwithinthe superintendentshouldapproachthis task withenthusiasmand for the superintendentto preparethe budgetand submitit to the greencommitteefor reviewand ,thegreenschairmanrecommendsadoptionby the boardof some casesafinancialcommitteeincorporatesthe coursemaintenancebudgetinto the overallclub budgetbeforeit is presentedto the and more boardsare requestingthat the superintendentbepresentduringthe meetingwhen the coursebudgetis the superintendent,becauseof his technologicaland practicalback-ground,is far betterqualifiedto give explanationto budgetarydetailsthan thegreenschairman,club manager,or otherpersonsthat do not have be preparedin one of two ways,the slipshodway and the by takinglast year'sbudgetand by addinga littlehere and there,hecomesup with his new forecast,a superintendentis shirkinghis duty and thorough,time consumingeffortwill producea much more meaning-ful consideredin developinga.

2 A superintendentmustknow what the club objectivesare, what themembersexpect,and what degreeof groomingis objectiveand ex-pectationscan usuallybe foundin the superintendent'sjob description,the letterof agreementbetweenthe club and the superintendent,or in the club' objectivesperiodicallyto bealertedto any changesin the definiteclarificationofclub objectives,the superintendentcannotpossiblypreparea ,a superintendentmust of the successof agolf coursemaintenanceprogramdependson the permanentstatusof the limitedoperatingperiodof the coursesin our area,lendsto a mixtureofpermanentand seasonalemployees,howeversuperintendents shouldgive prioritytothe permanentemployee,as he is the backboneof your following:1. It greatlyreducesthe need for time requiredto trainnew Duringthe off seasonfulltimemen can be used to renovateequipment,trim trees,groomhazards,mix and stockpiletopdressing,generalcoursecleanu p, and for For the most part,fulltimeemployeesare more considerateof equipment,therebyreducingdown time for Year aroundemployeesgenerallyhave more desireto producegood work,they take more pridein considerare any new Federaland Stateregulationsthat cou~daffectwage policies,for example,increasesin the your club 1S63unionized,superintendentsmust considerpay increases,increasedbenefitcosts,or addedcostsresultingfrom changesin work regulations,as outlinedin ,considernew maintenancepracticesthat couldaffectlaborcostssuchas the use of systemicfungicidesand new.

3 Sophisticatedsprayingtechniques,more and betteruse of transportvehiclesin movingcrewsfrom one job locationto the next,the use of multipurposemowingequipment,the use of improvedmachines:for applyingfertilizers,chemicals,topdressin g,seeding,trap raking,leaf anddebrisremoval,sod cuttingand 'tforgetthat automaticirriga-tion greatlyaffectsthe numberof man hoursneededto irrigatethe golf thirditem to considerin budgetpreparationis achievethe maintenanceobjectivesof his club,the superintendentmustrealize,the necessityof havingadequateand up-to-date,laborsavingequipmentat his ,increasedfreightcostsas well as salestaxesmust be takeninto accountas the superintendentseeksapprovalfor the pur-chaseof this some clubsconsiderationmay well be givento a leaseor a lease-buyprogramratherthan an out rightpurchaseof majorpiecesof VJe11 in advanceis a mustin equipmentpurchasing.

4 IIWhen-to-buy"requiresa carefulevaluationof presentequipment,the superintendentshouldcon-siderperformance ,reliability,annualmaintenancecosts,pres entrepairsneeded,worth,and expectedlife as well as what equipmentis now availableto replacethatpieceof consideringthe purchaseof a newlydevelopedpieceofequipmentalwayscons iderperformance,reliability,possiblelowe rfuel and laborcosts,and accuraterecordkeepingisessentialin preparingthis part of your an fourtharea for considerationis superintendentsmustrealizethat our we did yesterdayor last seasonmay not be economicallyfeasiblefor us to do todayor this collegecampuses,such as our staffhere at MichiganStateand inindustryare continuallydevelopingand testingnew and bettergolf ,Stateand Locallegislativebodiesare continuallychangingour worldbyremovingselectedchemicalsfrom the some instanceschemicalcompanieshave stoppedproducingcertaingolf are indeedfortunatethatthe new productsdevelopedare superintendentmustdevelopa chemicalprogramfor his golf shouldset up a fertilizer,fungicideand herbicideprogram,consideringthe chemicalspresentlyavailable,lookingat factorssuch as.

5 Activeingredient,toxicity,LD50,compatibi lity,additives,safety,rate of application,methodand ease of application,performance,reliability,cost per unit weight,cost per applicationper unit area and cost perunit area per unit developinga chemicalprogramfor yourcourse,alwaystake into accountthe previousprogramsthat have been , considerare flags,flag poles,tee markers,ball washer,and benches,thesealso are goingup in priceand don'tforgetthe replacementcostsresultingfrom fiftharea to considerin budgetpreparationis currentlyhave on hand influenceswhat you buy, that is, budgetfor next soundinventoryrecordkeepingsystemis of superin-tendentshouldalso considerthe shelflife of perishablesuppliessuch as seed,hygroscopicfertilizers,certainchemi cals,and highlyoxidativeand next,a sixtharea for possibleconsiderationis the advantagesofamortizationof oftenclubswriteoff expendituresin theyear of purchase,this leadsto problemsin that largepurchasesmany ,clubsare more awarethat a givenpieceof eq~lP:ment must be replacedin a ,financialplanssuch as slnklng64fundscan be set up.

6 Most publicor taxablecoursesuse this ,tion tablesfor golf coursemaintenanceequipmentcan be obtainedfrom the to considerin budgetpreparationis plansfor from many sources,this is ,thesuperintendentis the one personwho must constantlyreviewhis coursefor possibleimprovementsin playability,aesthetics,playerprotection, watercontrol, renovationshouldbe classedas long-rangeand than one yearto complete,whereshort-rangeprojectsarenorm allycompletedin one more expensiveand onoccasionrequiresoutsideconsultantsand long~rangeprojectswouldbe landscapingincludingtree planting;green,tee, and fairwayrenovationand relocation;streamdiversion;drainageof fairways;irrigationup-dating;a new maintenancebuilding, developfrom long-rangeplans,for example,rebuildinga coupleof new tees wouldbe a shortrangeprojectstemingfrom a long-rageplan to be made keepingthe golferin mind,don'tinterruptplay more ,the superintendentshouldcarefullyevaluatethe past yearsactualexpenseswhen preparinghis previousbudgetand the actualexpendituresshouldbe thoroughlyinvestigatedto determinewhetherthis very helpfulwhen evaluatingthesepast time studyis essentialwhen checkingpast laborcosts,are you spendingtoo much time in a ManningTabl~is also a valuabletool in alreadybeen mentioned,(1),a EquipmentMaintenanceFile and (2)

7 , an let'stake a look at our budgetpreparationproceduresat ,I shouldexplainthat BurroughsFarm is more than a golf course,it is a 500acre recreationfacilityownedand operatedby BurroughsCorporationfor the rest,relaxationand enjoymentof a worldwideorganizationemployingmore than 50,000peoplein the engineering,manufacture,andmarketingof electronicdata recreationfacilityconsistsof two golf courses,a championship18 and a short9; a gun club,both trap andskeet;a lake and swimmingarea with a boat livery;a vast picnicarea completewithtablesand stoves,swings,slides,merry-go-round"suff 1eboardcourtsand horsesho~pits;a sixtysite improvedcampgroundwith waterand electricityat each site;78completelyfurnishedrentalcottages ;52 privatecottages;37 permanenthousetraile~s;a ball diamondwith bleachers;and OperatingBudgetand ourCapitaland ExtraordinaryCommitmentProjectBudgetare preparedfor the wholefacilityand not brokendown for the budgetareasI will be showingyou are for the completeBurroughsFarm currentCapitaland ExtraordinaryExpenditureProjectForecasti s asfollows.

8 I1975 CAPITALAND EXTRAORDINARYEXPENDITUREPROJECTFORECAST1 . ReroofDanceHall3, Truckster2, PracticeBall Dispenser1, Dumpsters- 6 each1, PicnicStoves- 12 Turf Tractor4, Golf CourseSprayer2, Tee Mower2, Turf Trailer1, RidingGreensmowerwjverticutunits11. FairwayMowingUnit - 7 gang12. ExhaustSystemfor Kitchen13. StainlessSteelSink for Kitchen14. Tree Planting15. StumpRemoval16. Cart Paths17. ResealTennisCourts18. Golf CourseConstruction- Tees,Traps, PlaygroundEquipment20. Refrigerators- 3 each21. PowerSeeder4, , , , , , , , ,001, Salariesand Wages8101 - Executive& SupervisorySalaries8134 - OvertimePremium- Indirect8160 - OtherSalaries& Wages- IndirectII. PurchasedSupplies8404 - ResaleableItems8405 - Gasoline& eil8406 - DepartmentalSupplies8409 - PrintingMaterials8414 - Postage8439 - Fuel Oi18440 - NaturalGas8441 - Electricity8443 - Telephone- Local,8445 - Telegraph& Long DistanceTelephone8462 - Repair& maintenance - Material- Buildings8463 - Repair& maintenance - Material- Machines& Equipment8465 - Repair& maintenance - Material- Furniture& Fixtures8466 - Repair& maintenance - Material- Land ImprovementsIII.

9 PurchasedServices8559 - PersonalServices8572 - Entertainment8573 - TravelExpense- IndirectIV. OtherExpenses8635 - AssociationMemberships& DUes8686 - OtherTechnical& EducationExpensesV. ServiceBy Others8791 - Data ProcessingExpenseVI. FixedCharges8802 - Insurance- Automobile8804 - Insurance- Fire8824 - SocialSecurityTaxes8825 - LicenseTaxes8826 - State& LocalTax~s8827 - Taxes- Sales& Use8828 - UnemploymentTaxes8831 - Real PropertyTax - Michigan8832 - PersonalPropertyTax - Michigan668861 - Depreciation- Improvementto land8862 - Depreciation- Buildings8863 - Depreciation- Machines& Equipment8865 - Depreciation- Furniture& FixturesA coupleof quickcommentsaboutsellingyour superintendentshouldpresenta briefexplanationfor each of the carefulandaccurateexplanationis neededwheneverlargeincreasesor you arrivedat your is also helpfulwhen proposinga budgettoindividuallylist the past four or five yearsactualexpendituresin each of budgetis much more meaningfulwhenit is ourbudgetat BurroughsFarm is approved.

10 It is spreadover each monthof the otherwords,how much of each budgeteditem will be spentmonthby the end of each monthour accountingpeopleat BurroughsHeadquartersfurnishuswith a reportis used to evaluateour operationover the past month,by notingany variancesbetweenthe actualexpendituresand the same reportis a a veryhelpfultool,it lets you know whereyou are at. In some clubswherelargevaria-tionsare not too lik~ly,quarterlybudgetreportsshouldbe , let us reviewthe importanceof Firstof all, the budgetnecessitatesthe establishmentof a programandregulatesand emphasizesperformancewithinthat cannotpreparea budgetwithoutfirstestablishinga completeprogram,afterwhichchangesin yourprogramwill reflectas variancesin your It encouragesparticipationand promotesunderstandingby club officersand otherclub employeessUGh as the club managerand the witnessingyour budgetaryproblemsthey can come to a betterunder-standingof the superintendentspositionand the problemshe It requiresthat all expendituresbe specificallylabeled,wherebytheyimmediate lygain otherwords,expensesmust be listedundera The budgetidentifiesimmediateneedsfor the areasof concern.