How to Answer: What is the difference between operating and capital budgets?
Advice and answer examples written specifically for a Project Manager job interview.
27. What is the difference between operating and capital budgets?
Why the Interviewer Asks This Question
Budgetary analysis, discussion, and management are common responsibilities for many project manager positions. Interviewers ask this question to test a candidate's general knowledge of this budgetary concept.
Written by Karrie Day on April 26th, 2023
Remember To
Provide a brief definition and discuss the differences in the length of use, the types of assets, and how they are treated from an accounting perspective. Also, include a brief example of each type of asset to further demonstrate your understanding of these important budgetary concepts.
Written by Karrie Day on April 26th, 2023
Answer Example
"Capital budgets typically represent the money necessary for the long-term resources a company needs to do business, and operating budgets represent the money needed to keep things moving daily. Capital assets are usually planned for in advance and are depreciated over time from an accounting perspective. Operating budgets are usually steady and continually accounted for. The assets are not owned or appropriate to be depreciated.
An example of capital expense would be the purchase of a series of new servers to store data. An example of an operating expense would be the cost of software licenses that a company pays for."
Written by Karrie Day on May 9th, 2023
About the Author
I began my professional career as an IT Business Systems Analyst. I enjoyed the role, but I knew early on that I wanted to explore project management after moving through the analyst ranks. Fortunately, I had the opportunity to partner with several talented project managers while I was working to grow my own skill set. I learned a lot from them about how to approach strategic planning, communication, conflict resolution, and how to motivate various personality types to perform their best under pressure. I learned even more from their failures.
It was clear that project management was as much an art as a science, and I eventually got my shot at taking everything I had observed over the years and blending it into my own style for steering projects and programs successfully. While project management was not my ultimate career goal, I greatly value my time managing projects. I have utilized the skills I worked to refine in project management in every position I have held since. For example, I use the communication, strategic thinking, and tactical planning skills I regularly leaned on as a project manager each time I work with one of my coaching clients.
Whether working as a project manager is a career goal of yours, or you fell into it through circumstance, you’re in good company. Over 16 million professionals claim the title of project manager, and project management isn’t going anywhere. In fact, the number of project managers is expected to grow by 7% over the next 8 years according to the US Bureau of Labor and Statistics. According to the Project Management Institute, the global outlook is even more impressive boasting up to 33% growth through 2027. Regardless of the specific location, there will likely b a strong demand for project management skill sets in the years to come.
As a coach and writer for MockQuestions, I want to help you successfully navigate your upcoming interview for a project manager position. While some project manager skills are specific to the industry, location, and types of projects involved, many skills and behavioral traits are universally applicable to project management roles. This article will help any project manager prepare for a successful interview, and I encourage you to check out all of our sets dedicated to project management listed below.
Learn more about Karrie Day