Importance of budgets for business and personal growth

The Lions Club Colombo Host District 306A1 recently concluded the fifth session of the Money Matters webinar series – ‘Money Matters 1.4 – Where Does My Money Go? – Personal Money Management Tips & Tricks!’. The webinar series is part of the Lions Club’s continuous efforts to optimise financial knowledge and inclusion in Sri Lanka.

The session was facilitated by distinguished speaker Dankotuwa Porcelain PLC Chief Executive Officer Channa Gunawardana, who provided an insightful look into the importance of budgets for business and personal growth. The session was moderated by Certified Expert in Financial Inclusion and Lions Club Colombo Host 306A1 (2021-22) President, Asitha Pinnaduwa.

Pinnaduwa gave a brief introduction to Channa Gunawardana, his vastly diverse career and expertise. Gunawardana spoke about the importance of budgets in large corporations, SMEs and for personal growth. He discussed how crucial a budget was in terms of establishing a proper direction for businesses, and stated that the use of the budget was more important that the actual availability of one. 

He went on to speak about the elements required to create a budget such as the necessity to involve all stakeholders and the constant need to compare actual figures against the budget. He explained that every operational cost must be considered, and an in-depth knowledge of the market was paramount to formulating a budget, adding that planning for the future was also of great importance when creating a budget. Further to this, Gunawardana said that budgets were also important for personal growth and the importance of knowing exactly what the result was, and what avenues of income were available to enhance and complement that growth. 

The second segment of the discussion was about the use of the budget and the importance of comparing actual figures to budgets and evaluating the reasons for any discrepancies. Gunawardana explained that the human factors must also be considered as they were an essential part of budgeting. He emphasised the fact that a budget should be used as a motivator on both a business and personal level as opposed to a deterrent or obstacle for innovation or progress.

He added that a budget should be used as a guideline for operations and for personal growth, and it was important to know when to take a risk and break away from the guidelines. Gunawardana expressed the need for discipline when both creating a budget and using it effectively.

The webinar concluded with a Q&A session where Gunawardana answered a series of questions pertaining to optimising borrowings, the importance of factoring in tax payments to everyday life, the effect of emotionalism on budgets and questions on the current income and debt issues faced by the country.