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January Transfers and Rumours


werstayinup

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6 minutes ago, Warren said:

If I was the accountant I'd see it this way .....

The club should have a total annual budget and also likely a total medium term budget over say 2-5 years. 

The budgets should have separate cost centres covering all the different types of income and expenditure. So player wages is likely one cost centre, depreciation will be another, season ticket income another etc. 

So the owners and managers should set up budgets that are realistic and reflect what they want to do. They will decide what should be spent on player wages. What needs to be charged as depreciation is a little more deterministic since it's a calculation based on accounting standards. 

Coming to your question the respective budgets are separate but ..... The total budget for the club reflects the overall financial targets. At the extremes that is influenced by the needs to remain solvent and trading whilst also complying with the financial fair play rules etc. 

Hence real life comes in to play. Most obviously if season ticket sales / attendances are significantly different than expected that should impact the wages budget. If attendances are down 2k then all the club's expenditure budgets are challenged and a reduction in the budget for player wages should be expected. Otherwise the club will sooner or later run into significant financial trouble. We've been there before! Very bad. 

 

I separated the player staff budget because - as far as I know - it's the only budget to have to conform to the Profit and Sustainability rules, under FFP? I realize that, if the Club's income is more / less than they anticipated, there would need to be some juggling. or there would be a bit more cash available...but, largely, it's the players' transfer fees and Salaries that have  to be more closely monitored, so they don't fall foul of FFP? 

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