New Year, New Strategy? Building a Better Business Budget

Happy 2018 everyone! We’re a few weeks in now and that means we’re all looking to the future and everything wonderful it has in store.

The new year represents the ideal time to take a hard look at your business processes and evaluate what’s working and what isn’t, and one of the most important aspects to look at is your budget. That’s why this week we’re focusing on helping you build a better business budget.

Your organization’s budgeting process is critical – so it had better be good! If you’re a bit concerned that it isn’t truly as good as it should be, these things should help you establish a process that checks all the boxes. And you will know if it isn’t working by the number of complaints you get from your budgeting team.

Step 1: Set expectations in advance and make business budgeting a part of the culture. It’s important to make sure that all those involved in the budgeting process are committed. Set standards for everyone to follow and outline the objectives.

Step 2: Don’t work in isolation. Build a case for each department. Get people from each department involved to best understand realistic needs/wants and to create a budget that will be as accurate and achievable as possible. Collaboration and communication is key.

Step 3: Base the budget on actual numbers. Resource allocation should not simply reflect last year’s budget plus inflation and it shouldn’t be done horizontally. Those departments that drive the greatest profits and growth need to be fully funded before moving down the list. As hard a pill as it may be for some to swallow, those at the bottom of the list will receive what remains in the budget, if anything – that’s just good strategy.

Step 4: Hold everyone – including yourself – accountable to the results. If things need to change, change them, but make sure everyone knows about the change and why it is happening. Make sure contributors are aware that their numbers matter.

When it comes to business budgeting, there is undeniably a range of good to bad. While many companies fall somewhere in the middle, it isn’t too terribly difficult to adopt a process that improves your existing process and these budgeting best practices should help.

At SHEA Global, we’re committed to helping you achieve success with your business budgeting and forecasting and have the solutions that make it easy to move into 2018 on a solid foundation. Call us at 1 866 239 1113 or visit today for more information.