In many respects, department budgeting and reporting is easier than project budgeting and reporting.
Typically, a department budget is created during annual business planning. Every business does this a little differently, but they usually follow a universal pattern.
To create the department budget, the department manager reviews what was actually spent in the department during the previous year.
The manager then makes the appropriate adjustments to those numbers. For instance, if the department is increasing or decreasing staff, the personnel costs will change; and the general supply costs and travel costs will fluctuate due to inflation/deflation.
If nothing changes, next year’s budget should be whatever the business spent the previous year.