When it comes time to build out the budget – be it for the month, the quarter, or the year – collaboration is critical. A few weeks ago, we spoke about the differences between top-down and bottom-up budgeting and the positives and negatives of each approach. One of the most important advantages of the bottom-up approach is that you are getting information on the budget from those who use the resources most. Successful corporate budgeting depends on a wealth of information – so why not attempt to gather that information from a number of different sources?
You don’t want to budget in a silo. While working solo may seem appealing for a number of reasons, budgeting alone, without managers, has the potential to end up with a budget that doesn’t work. Your various team members may have greater insight into the various elements that you may not think about. Talk to people closest to the action.
This has the twofold effect of speeding up the process and increasing accountability. If your various managers have spent the time working on the numbers, going through what their annual spending is/should be, that will be reflected in the resulting budget. This helps to develop a certain level of commitment to the numbers. The managers themselves know why each item is as it is, and are more likely to adhere to it as much as possible.
When it comes to successful collaboration, communication is key. You need to clearly outline the organization’s objectives. This way, when the various departments are asked to create their own budgets, they will do so with the right goals in mind.
Getting input from various department and using it to inform the budget helps to ensure that it is accurate, realistic and based on actual requirements of those working in the departments. If you don’t communicate with those whose roles rely directly on the budget, you may find yourself with a budget that just doesn’t work.
If you’re looking for a new way to budget – or a way to improve it – consider the software available that makes your current budgeting and forecasting process quicker and more streamlined. This can increase collaboration among the different departments – operations, sales, marketing, development – who should be involved in the budget.
True Sky offers you that. True Sky is a corporate performance management system that helps you build a strong corporate budget, letting you take advantage of collaboration easily. Find out more by visiting www.truesky.com.