The role and demand of CEOs is constantly evolving. Companies and their employees rely on the CEO for strategic direction and growth plans. A large part of planning for company growth includes budgeting and forecasting, whether it be done annually, quarterly or monthly. In today’s blog, we will discuss the importance of budgeting and forecasting, and list some of the most important tips we found from this article. It was written for CEOs who are looking to improve their budgeting process to give their company the confidence they need to move forward with growth plans.
Collaboration is Key
Employees from all levels of your organization have valuable input they can provide. This may include bringing to light some issue you may not have known about that may require financial support or some additional resources. Additionally, keeping open lines of communication will help create a synergy within your team that can lead towards creative growth ideas to help your company reach short and long-term goals.
Be Detailed, but Don’t Overwhelm Your Team with Excess Information
Every organization has common things they budget for, as well as differences based upon products/services offered, number and size of departments, etc. It is important to make sure you are budgeting for the right things, but don’t include a dump of financial information or budgeting categories in every spreadsheet. Only show the information you need to, so as to keep things on track and organized, and not to overwhelm your budget team.
Temper Your Historical Data
Historical data can be useful when trying to identify trends, but it shouldn’t be a set guide for determining future years’ budgets and forecasts. Company structure changes, industry regulations change, and economics change. As such, relying strongly on past data to benchmark future performance can be dangerous. You can use it as a tool to help develop your numbers, but don’t rely on it as being a strong or only guide to future budgets and forecasts.
Be mindful of the buffer you include in your budgets. Buffers are great to help protect against unforeseen circumstances throughout the year, but it is also important to include a buffer of time in your budget preparations. Ensure you are providing yourself, managers and budget contributors enough time to input the budget and forecast numbers so that quality work will be submitted that won’t require major fixes or updates later on.
Have the Best Tools Available
There are a variety of tools and software available to help you build your budgets and forecasts. It might be worth taking a look at them and investing in one to help get the job done right. True Sky can do just that!
True Sky is a budgeting, planning and forecasting solution. We use the familiar interface of Excel, can integrate with almost any CRM, HR or electronic data system, and have sophisticated workflow and data tools. To find out more about how True Sky can help your organization, give us a call today at 1 855 878 3759 or visit our website www.truesky.com