This is part 10 of 12 in a blog series on understanding the risks of your current planning, budgeting and forecasting process. For the next few weeks, we’ll be posting a new article every Wednesday that will look at the challenges of the budgeting process and how to solve them. Catch up on last week’s post, Rubber-Stamping Can Lead to Bad Decisions.
Each of the divisions, locations, or other cost centers within your enterprise works from a budget. They likely have their own known and expected expenses and financial goals, and should be able to justify the budgets that they prepare for upper management. Making it easier for key managers to justify their data also makes it easier for managers to review and approve their budgets. To facilitate this business budgeting process, all you need is the right centralized budgeting solution.
Who knows their department better than the manager or person in charge of that specific division? Managers at any level of the business likely have a better handle on the details and nuances of their team and departmental goals. Senior management puts corporate-wide strategic business goals in place; however, their department managers are responsible for the planning, budgeting and forecasting process for their specific business unit. They are also responsible for working within that budget once it has been approved. Justifying departmental budgets shouldn’t create animosity or add complication to the often time-consuming budgeting process.
Download 21 Ways Your Budgeting Process Puts Your Business at Risk to learn how a centralized budgeting solution can improve collaboration and efficiency of a traditionally complicated budgeting process. Senior management can provide customized templates for each department or business unit to complete for the budgeting process. The templates offer a standardized, consistent way for each department to submit key budgetary or financial data. A simple, easy-to-understand template should remove some of the uncertainty with compiling and justifying budgetary data. Clarifying assumptions and estimates shouldn’t require separate steps or additional meetings. A centralized budgeting solution offers an easier way for managers to justify their thinking, which also provides greater value to the resulting data and participation in the planning, budgeting and forecasting process.
You have hired talented people to manage your business units and departments. Engage them during the planning, budgeting and forecasting process and support their ability to create specific budgets that support your strategic plans and goals. Download 21 Ways Your Budgeting Process Puts Your Business at Risk and contact us for additional guidance with improving the budgeting process by implementing a better corporate performance management (CPM) solution. Contact True Sky for more information.