7 Tips to make your planning and budgeting season valuable

by Finance

And maybe even… Enjoyable

Planning and budgeting season comes back every year.  The prospect of it can be daunting!  In North America, the process takes 4 months or more in 60% of organizations according to a Deloitte survey.  The long discussions between Senior Management and operational managers necessary to agree on sales and expense targets, the long hours spent in front of spreadsheets and the pressure of having limited insight on whether the submitted (or imposed) projections are even achievable can become a challenge.

Although no one has a crystal ball (myself included…otherwise I would not feel the need to write an article on the subject), there are means to ensure the planning and budgeting process serves your purpose as opposed to you becoming its slave.  Here are a few that I can think of:


1.Establish and agree on high-level targets aligned to the strategy prior to launching the full budgeting process

As the planning and budgeting process can sometimes be cumbersome and inflexible when reflecting a high level of details, collaboration between various levels of management to agree on some projections will allow to not only aim effectively but also avoid useless back and forth activities.

2.Understand the factors that drive your business results

When planning and budgeting, owners feel accountable to attain the established targets.  Embedding non-financial key performance indicators (KPIs) and understanding their cause-and-effect relationships with expected results, will help you gain confidence in the projections. As an example, customer satisfaction, market studies, and economic indicators can help project sales.

3.Define clear roles and responsibilities

Accountability for achieving results and attaining projections belong to managers throughout the organization. It is therefore only logical that these managers are fully involved in coordinating and reviewing planning and budgeting models to validate their coherence. (I have seen many in the past that proved too complicated and unexplainable when left to junior resources).

In addition, when non-financial KPIS are considered, be sure to have the right expertise to interpret trends.  Remember, CFOs are often only accountable for their own Finance budget, and can only provide support to other functions.

4.Introduce the right technology

EXCEL spreadsheets are often used instead of more robust planning solutions. This occurs despite some known limitations such as the difficulty to share, consolidate or introduce real-time adjustments throughout the organization.

Not only will a vendor- provided solution address these limitations, it will offer enhanced capabilities such as what-if scenarios, the use of multi-dimensions and potential integration with business intelligence (BI).

5.Introduce a rolling forecast process

As most organizations tend to measure and reward performance over the financial year, very few of them feel compelled to forecast an additional month or quarter as the year progresses. Doing so, however, will save a lot of time and headaches at year end.

6.Use multiple dimensions

Most organizations use time, GL accounts and functions as their baseline for planning and budgeting. You may want to “slice and dice” your budget according to additional dimensions such as region, product line or any other dimension that better reflect accountability relationships.

Be cautious and try to avoid defining dimensions that are too granular for the capture of actuals, otherwise doing so will prove useless and overly demanding.

7.Link with performance management

Group, individual, yearly and mid-year performance goals and reviews should absolutely be aligned to your strategy and budget in order to ensure your workforce focus on attaining the organization’s objectives.  Analysing, evaluating and rewarding on variances between budget, forecasts and actuals will also ensure continuous improvement and facilitate the budget building process over the years.


Finally, if you still perceive the planning and budgeting process to be painful and time-consuming, embedding these 7 tips can help you initiate and drive changes to improve the experience. What do you have to lose with better alignment of the entire organization along common and strategic goals, improved ownership of results and a reduction of time and effort?  Real planning and results management will always be more valuable than “number-crunching”.

Combining Strategy and Innovation

Combining Strategy and Innovation

Capturing the essence of our customers’ (or prospects’) needs and jobs-to-be-done (JTBD) enables us to develop new innovation opportunities. Combined with the transformation of our business models, this allows us to have maximum impact on value creation and the development of a competitive advantage.