The End of fincial year is here so if your team is looking at Budget Planning (and you should be), we’ve got 7 juicy tips for you.
We’ve already spoken about how to get your Marketing Budget approved (you’re welcome Marketing Managers) before and heading into the end of the existing financial year, we know most of our clients will be busily Budget Planning for the next financial year. You’ve probably made your list and checked it twice (we know we’ve got the wrong season but it’s still relevant here) and we’ve got 7 super helpful tips for you that’ll ensure you’re covering all bases.
It’s all about aligning your organisational goals
Before you can create any kind of Strategy, you need to identify the challenges and goals within both your organisation and industry. Consider things like pending changes in regulations such as new tax laws and take the time to compare your organisation’s performance to industry standards using online tools from sites like the CPA and so on. Sure, every business is unique but by gauging which areas you’re well ahead in and well behind of your competition, you can make better decisions about where to allocate resources moving forward. This is where you can also assess any risks and potential financial impact these risks may have on the business in the event of a worse case scenario taking place.
Remember, all budgeting decisions should also align with and consider your business’ bigger short and long-term goals. Why? Everything you do within your business should be contributing to achieving these goals somehow! It can be super helpful to reverse engineer the process - figure out where you want to be and then identify the steps needed to get there. Each department within your business will be preparing a similar budget ‘wishlist’ so it’s important to be aware that your ‘must-haves’ may differ from those in other areas of the organisation.
Collaboration is key
Building a Budget Plan that proves to be a success is a collaborative process - budgets should never be a one woman or man task! It’s important to ask the relevant people for their input to ensure what you’re planning is achievable with the allocated resources. While management may be responsible for final sign off on the Budget Plan, it’s always wise for them to consult with their team members for their perspective. Often, they are the ones doing the daily tasks and will have a better knowledge of what is and isn’t possible.
It’s also really important to limit guesswork as much as possible. A couple of extra zeros added on to things can become significant amounts over time so source the most accurate information possible. Communication really is key here - if things aren’t adding up or the management team is unclear in terms of their goals, it’s unlikely any Budget will gain Board approval. And here’s a hot tip: make sure whatever you put in front of the people approving the Budget actually makes sense (to people other than you and your direct team).
Ensure goals are measurable
Adopt the SMART formula when defining your goals and you won’t go wrong. An important piece of the puzzle is identifying the right metric for each specific goal. Metrics may also differ from department-to-department, which shouldn’t matter too much as the bigger focus should always be Return on Investment (ROI). Again, collaboration here is vital and often leads to the best results - as much as we love emailing, it’s a good idea to pick up the phone or set up a meeting (make it a walking meeting to make it a bit more fun). By keeping everyone in the loop, you’re putting forward a level of transparency that might just come in handy down the track if things don’t go to plan for whatever reason.
Sure, every filmmaker wants to go out there and make Captain Marvel but if you’re working with a budget in the thousands and not the millions, that’s going to be tricky. With whatever goals you have down on paper, ensure you’re taking a measured approach and not expecting miracles overnight. That will only put unfair pressure and expectation on people to deliver the goods. Yes, aim high but break-up deliverables into achievable chunks and track your progress. Always look back at past Budgets and use them for future projections - chances are, there are some real gems in terms of information at your fingertips right there. Oh and don’t forget to allow for the unknown… those things that no one can possibly predict, this just gives you a bit of breathing space in the event of a rainy day.
Don’t get stuck cementing things in stone
Your Budget should be flexible and change as your organisation evolves. It shouldn’t be something you review annually but on a regular basis so you know exactly how things are tracking. If certain areas are trending towards going over budget, look for areas where the business is currently below budget and borrow as needed. If the numbers aren’t adding up or are in the red, it’s time for a refresh and to see if you can eliminate some things or put them on the back-burner for a while. Embrace your inner Sherlock Holmes and seek out answers if things just aren’t adding up as expected!
Invest in the right tech tools
Technology is a wonderful thing and can save your business a heap of time and money, providing you invest in what you genuinely need and not the latest fads or the next bright, shiny object. Data is a game-changer and arms you with the power to strategise like never before - it takes the guesswork away. So be innovative and don’t allow yourself to get sidetracked. Identify the tools you need and budget them in so that you can give your company the best chance of achieving its goals.
Spread the word
A lot of managers guard budgets with their life but they really shouldn’t be kept secret. Of course, some financial information will only be made available to a limited group but sharing the Budget Planning love around helps people to understand why certain decisions are being made. It also leads to greater transparency and better communication. Trust your team and empower them with the information they need to improve their performance and understanding of the organisation.
Need extra help with Budget Planning or figuring out which tech tools you need for the upcoming financial year? Contact our Woven team for a confidential chat and we’ll be in touch.