Every business needs to plan ahead by forecasting the future. Done well, it is a powerful tool for steering and controlling the company. However, in too many cases, the process seems never-ending, is plagued with conflict and manoeuvring, and leads to short tempers & injured feelings.
It is incumbent on you to approach it in a way which minimises the workload and the potential for stress. This article sets out some proven approaches to the process and helps you to deal with the vagaries of budgetary behaviour and game playing. It is written from the point of view of a CFO.
- Budgeting and forecasting is a business process before it is a financial one
- Plan and organise your process to the utmost
- Leave time for revisions and debate
- Use technology to the best effect
- Be alive to the behavioural aspects of budgeting
- Ensure the maximum involvement of operating managers