What financial knowledge should a property manager have?

Different companies and different project stages will use different budgeting methods. According to different classifications, here are several commonly used budgeting and management methods.

Fixed budget and flexible budget

Fixed budget and flexible budget method are differentiated budget methods based on different quantitative characteristics of their business bases.

1. Fixed budget

Fixed budget, also known as static budget, is based on the normal and achievable business level during the budget period. Generally, we make judgments based on past experience and prepare new budgets.

The budget made by this method is always the same, so it is more suitable for budget projects with fixed expenses or relatively stable amounts.

2. flexible budget

On the basis of habitual cost (expense) classification, according to the interdependence among quantity, cost and profit, and taking into account the possible changes in business volume during the planning period, flexible budget has formulated an expense budget that adapts to various business volumes.

This budget method reflects the level of expenses to be paid in different business situations and makes up for the defects of fixed budget.

Incremental budget and zero-based budget

Incremental budget and zero-based budget are different budgeting methods based on the previous budget or actual performance.

1. Incremental budget

Incremental budget is to adjust related expenses on the basis of upfront cost, according to expected operating conditions and combined with management needs.

Many property companies adopt incremental budgeting, which has the advantage of relatively less basic workload and relatively low requirements for budget personnel.

2. Zero-based budget

Zero-based budgeting method is to consider whether the contents and expenditure standards of various expenses in the budget period are reasonable one by one according to actual needs without considering the upfront expenses and their amounts, and to prepare the expense budget on the basis of comprehensive balance. That is, there is no previous data to judge, so we should reconsider from "nothing".

New projects generally adopt zero-based budget.

Regular budget and rolling budget

Regular budget and rolling budget are different budget methods based on different time characteristics of budget period.

1. Regular budget

The regular budget takes a constant accounting period as the budget period. In most cases, this period is one year, corresponding to the accounting period.

2. Rolling budget

Rolling budget refers to separating the budget period from the accounting period when preparing the budget. With the implementation of the budget, the budget is continuously supplemented and rolled back one by one, so that the budget period always keeps a fixed length (generally 12 months). The feature of rolling budget is that it will refresh the budget regularly and send it back according to the refreshed budget.