How do you justify your budget?

 
LIBERTYVILLE, Ill. - Jan. 18, 2017 - PRLog -- Schonfeld & Associates reports help companies determine industry norms of spending on advertising, marketing, R&D, and SG&A by industry type and company size. This standardizing is especially useful at the beginning of the year as companies, and divisions within companies, are setting annual budgets. We see our clients work to establish their yearly forecasts by a variety of methods.

First, there is no simple answer to this problem. It depends more than just on the company, but on what each individual within the company expects and wants from the following year, as well as what he or she has learned from the past year.

Each budget is not in a vacuum. It will be scrutinized by a CFO or a budget committee and may likely change before it is finally approved.  We know that each budget needs to justify how it will help a manager achieve their goals and that it must be defensible.

Outside of cost of goods sold, the SG&A expense line item on the income statement of many companies is typically the largest. So how do firms forecast this? Some use bottom up forecasting where each business segment determines what it wants or needs for the year, which adds up to the total budget. Others use top down, where the total budget is set or projected based on macro trends and then each division lays claim to part of it. The commonality is that the claim of each manager needs to be defendable.

We cannot tell you what will work for your company, but what we do is give you the data necessary to make informed decisions. Schonfeld & Associates SG&A Benchmarks presents SG&A spend by industry sector.  Each company's information is presented, along with annual sales and geographic location of headquarters, so that you can find your closest peer, or competitor, to determine what your budgets should include.

The information presented includes the past two years of historical data for SG&A spending, SG&A/Sales, SG&A Growth, and Growth in Sales for each company as well as a range with 10th, 50th, and 90th percentiles for companies within each sub-industry group, so you can hone in on what is appropriate for you.

This report is widely used to monitor competition, provide benchmarks, setting budgets and business planning. For a sample of the information provided in SG&A Benchmarks please visit us at http://saibooks.com/index.php?option=com_content&view=article&id=64&Itemid=65
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Tags:Budgeting, SG&A spending, SG&A Benchmark
Industry:Business
Location:Libertyville - Illinois - United States
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