Does creating the budget pull managers away from caring for their customers

It is budget season, so a question.
I have worked for companies that require large budget meetings , many of which vendors have to pay for.
I have worked for companies that think that is a waste of time.
What I have found over the years is that managers work really hard on their budgets, it pulls them away from caring for their customers, and at the end of the day corporate ends up just making the budgets be what they need.
Not passing judgment on any methods, just curious what people’s thoughts are.

Currently my company doesn't involve managers in the budgets.. We get to spend and report (as in we report daily our spending and accounts payable but that is it) .... but they don't give us spending reports or budget reports

I am with an owner now where I have no budget, never see financials, never see bills etc. So wierd to me. But I do not miss wasting my time doing my budget just to have them cut it to make it the way they want. I have always said, let the owner do it and stop wasting time.

my owner has a budget that ive never seen... he thought i was crazy when i asked if i could see it lol... he just tells me to spend whatever i need to keep everything going. he knows i wont take advantage... but i still want a budget!

It is important that the manager play a role in the budget as well as Maintenance Supervisor. You know your property and needs. The changes from corp usually come due to not having back up to support the need for things. So if you want something in the budget be prepared to share the need for it. Obviously they are going to push for higher occupancy, higher rents and lower expenses. You have to be able to back up what you put in the budget and advocate for the needs. You may not get it all but maybe some!

I agree.. we can propose anything .. it just comes down to us not seeing the numbers.. this month has been a turning point for my owners allowing for lots of projects.. which is nice.

100%this! We encourage our managers to take ownership of their properties and the one main way to get their buy in is to have them do their budgets. We are actually doing our budget nootcamp this week and I wouldn’t have it any other way!

Budget analytics and creation is never a waste of time. It is a vital part of seeing your property from 50,000 feet so to speak. I agree it can be frustrating to work to create what you perceive as a realistic budget only to have upper management revise it to a more aggressive projection, BUT believe me, your knowledge of the asset, its position, and where value can be added will not go unnoticed by your regional or owners!

Managers really learn a lot about their properties by preparing budgets, and learn what's important to their owners and/or management company. Taking this responsibility away from them is doing them a huge disservice.

Agreed. It also shows them the GL accounts and reclasses over the year. You can’t accurately budget when you miss code your bills all year. Pay attention all year.

I think it is good to have the managers look at the year to date income and expenses and annualize them in addition to checking with vendors for anticipated increases to assist the regional in preparing the budget.

I totally agree. I feel like I’m wasting my time and asset management is going to change it to what they want anyway

You want input on your own budget but a lot of it can be done off of historicals.

I agree about the changes made to what a mgr inputs and it’s a different outcome when they receive it at year end. I want their feedback, do what I can to achieve their goal, as well as my owners objectives. Managers need to be creating occupancy, making our residents and their team happy!

I agree Robert. Keep budgets at the corporate level with property managers input and a wish list as well as any other comment they may have related to market, income and expenses. A brief questioner to the managers to cover the items that they feel are important. Your correct, they always get changed in the end.

I have been with companies who've handed down the budget and others who left it 100% to me. I love my current company because I get asked lots of questions about need, what we'd like, resident service and, in the end, I get strong input and then it's considered in the larger goals.

As a Manager, you know the property best. Therefore you should be doing the budget. Even creating a 5-year plan. Then it is presented to the Mgmt Company and revisions made. Obviously, modifications will be made. That is why a 5-year plan should be in place. You are looking out for the owners best interest with their investment.

I totally agree but I think as a Regional you should know what’s going on at every property and be communicating with the manager all year long. I Don’t disagree they should have feedback I just think sitting in 2 to 3 day budget workshop’s is a waste of time.

As the manager you should really take time to fully understand the budget process and the cause and affect of every dollar that comes in and out. Those budget workshops you should want to go to and learn more. As a Regional I am responsible to prepare the budgets at my properties but my Managers have to give a lot of input on what is truly needed at their property.

I think the most telling comment here is "corporate just makes the budgets be what they need". That is a huge mistake. If corporate knows so much more than the on-site team, they should be training that team to understand why they do not agree with the budget planned by the site folks, not just cram it down. When a budget is pushed down to the site level with instructions to "make it happen", there is no buy-in from the team, and it is less likely to succeed. I think there should be a budget meeting at the regional level that includes managers and maintenance supervisors. As they network in the meeting, they find new solutions to problems, vendor issues, and most importantly, a team is created that will work together long after the meeting is over. Regional managers need to fully understand the needs of the community, and that information is best gained from those who have boots on the ground, not from some analyst in the corporate office. They should be prepared to demonstrate the needs of the property and the team to corporate, and work hard to keep the budget as close to what was created by the on-site teams as possible. Side note... I don't think vendors should ever be coerced into paying for these meetings. That can make managers feel they "must" use those vendors, rather than finding the best value for the property.

Love this reply.

Thanks Robert. This is one of my "hot buttons". I can't stand it when I'm teaching a seminar, talking about keeping notes in a budget book for the year, or just referring to the budget, and attendees tell me they don't even see a budget! Talk about 1960's management style!

I appreciate the time offsite without distractions to work on my budget and the time with peers and leadership to really focus on the budget it also helps to pool the experience in the room

By completing a budget, it helps a manager become a financial manager as they run their multi-million dollar asset, inflow and outflow. The manager is entrusted with a huge responsibility. By receiving the budget in return, it should help a manager understand the business side of income-producing real estate. Sometimes a manager is in a vice between residents and owners, wanting to say "yes" to everyone. As property managers, we take extremely good care of the asset and our customer. The owner is our other customer, who had many options of where to put their money. They chose our property for a return on their dollar, just as we do in a 401k.

Well said Kathy!! I am so grateful I was able to work for you in the beginning of my Property Management career!! You taught me pretty much everything I needed to know and then some!!!

I want to hire you.

Robert Tinning Kathy is the best ever but she is retired but I bet u can recruit this genius of a woman for training

Robert Tinning thank you. I was always a firm believer in having the manager start the budget process so they could understand how the money came in and what they needed to do to make that happen. Yes, I had meetings so we could input together, along with help from their Reg Spv. It was also a great time to do financial training.

A budget is the map you need to follow to meet the owners goals. Its a basic that everyone needs to know how to build. On site mgrs aren't always included in the owners final approvals and goals. Keep learning even thru the frustration!

LOVE the comments! LOVE our industry and how we all help each other!

Budget to your first re-forecast..

Do your revenue forecast on 12/31 of that year. 90% of heartburn comes from missing the GPR or Occupancy # out of the box, and it has a compounding effect month over month.

Budgets are necessary and required for many different reasons. How can a team hit a target if they cannot see it, and a budget it a target. As I have taught in hundreds of workshops, budgets do not have to be a lengthy process or an intimidating process but for some reason we have made them such. No it does not take away from the duties, rather it helps establish if you are doing the right things during the coming year and meeting goals and objectives.