Strong business management involves a good budgeting and forecasting process. But who is ultimately responsible for that budget?
Depending on the size of your organization, you may have a dedicated budget manager or finance team. You may have an accounting department. Your operations manager might take on the bulk of the budget, or perhaps your sales department if they have the highest departmental expenses.
Whether you have dedicated resources or not, though, the question remains: who is ultimately responsible for the budget?
The answer is everybody.
One of the essentials of good business management is the people who work for you. Your team needs to be on the same page and in operational alignment — and that includes finances.
Consider the following scenarios:
- You have one person or one department who is coming in over budget. At the end of the year, the whole business is in a deficit because of this one budget area.
- There are budget resources allocated to a specific department that have not been used and likely will not be. At the end of the year you have a surplus, but perhaps that surplus could have been used elsewhere in the organization during the previous year and driven more growth for your company if the department had only told you sooner.
- The IT department wants to buy a new business intelligence tool that would improve productivity and efficiency, but they don’t know how long it will take to earn back the return on investment.
- The accounting team uses different language from the sales department. When an accountant is looking at the budget, he or she thinks “What G/L account would this fit into?” When a sales manager is looking at the budget he or she thinks “This is how much was spent on airline tickets, this is how much was spent on accommodations, etc.” The result is a budget with confusing line items that takes longer to piece together and analyze.
- You are making a strategic change for the company and focusing on three main objectives for the year ahead, which are reflected in the budget. Unfortunately, this means prioritizing certain departments over others and the departments whose budgets have been cut are upset.
The reality is that today’s corporate budgets should be strategic, and they are not just one person or department’s responsibility. Everybody involved in your business is responsible for making sure that budget accountability is upheld and that targets are met.
On the flip side, your company’s leadership team or budget point person is responsible for instilling this company culture. It’s important to make sure that team members understand their role in the budget and understand why you are prioritizing certain elements or asking that a certain objective is met.
You want to encourage open communication, both for when things are going well and when they are not. Ultimately, the whole organization will be better for it.
Involving your whole team in the budget process doesn’t have to be difficult. Corporate performance management tools, like True Sky, make sharing the budget easier than ever. You can also create customized workflows to see who has and hasn’t reviewed the budget.
Learn more about how to improve your business management budgeting practices in our free eBook, How to Successfully Involve Your Whole Team in the Budget Process.
Want to test out a demo of True Sky? Call 1 855 878 3759 or visit www.truesky.com