Winning the corporate budget battle

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There is good news on the corporate budget front, and managers could use it if they face a brutal battle for departmental funding.

Billing Platform’s 2022 Annual Finance Trends Survey indicates that budgets are set to increase in 2022, with 79% of corporate finance leaders saying their budgets will be larger in 2022 than in 2021.

Businesses don’t seem too skittish about a potential economic downturn, with just 21% of executives saying it’s “likely” economic factors will have a big impact on the company’s budget, compared to 39% who said the same in 2021.

For managers who must prepare and negotiate a service budget, it can be a grueling process, even in good years.

According to corporate budget experts, the trick is to fight creatively and even aggressively for a bigger slice of the corporate pie. They say managers who assert themselves at budget time get more of what they want for their departments.

“A manager’s best budget is a business case in which the manager makes and delivers on their promises,” said Trey Taylor, general manager of Taylor Insurance Services in Valdosta, Georgia. “In a nutshell, a budget is a manager’s way of saying, ‘If you charge me with this and give me that much money to achieve it, I’ll produce the results you want.'”

If you can develop the subject matter expertise so that other people start coming to you for budgeting ideas and strategies, you’re on the right track.

“That person, in any organization, never struggles to get a perfectly funded budget and get noticed as well,” Taylor said.

Budget management tips for managers

With so much at stake during the corporate budgeting period, what is the best way for managers to play ball when looking for more money for their budget?

Here’s a look at how managers can set the stage for success and beat the budget process time and time again.

Link money requests to business results. When delivering a budget request to company finance managers, managers should draw clear lines and say, “Here are the tools and resources I need to achieve
our specific objectives.

“A manager’s budget isn’t just a list of wants and costs,” said Amy Spurling, founder and CEO of Compt, a Boston-based human resources technology company. “It very clearly ties those needs to the outcome of the availability of each of those resources.”

Spurling cited a concrete example. If you are managing an engineering team and they want your team to create “X” new products, or if there is a product roadmap, it is up to the manager to determine the following:

* What does the cover look like? How many engineers will you need?

*What new tools can make you more efficient?

*What resources could you add to your process to reach your goal of “X” new products?

According to Spurling, if you’re given a budget that’s less than you think you need, a manager should say, “Okay, but with the resources available, then we can accomplish 80% of what you asked for.”

In other words, it is up to the manager to show a chief financial officer (CFO) the calculations when seeking additional budget funds.

“I’m not the expert on this, so I need you to show me the way,” Spurling said. “If you can show me what it takes to get the result and what happens if you don’t get the budget you need, then I’m more inclined to say, ‘Okay, the requested budget has sense. ” “

Talk to your team. Managers should also seek input from their peers, staff members and line managers.

“It doesn’t happen enough,” Taylor said. “A bottom-up conversation with your team [is one] in which you ask them “Where are we not spending the money efficiently?” Where could we do a better job? And where are we seriously underfunded? This, Taylor said, will provide insight into how capital actually flows to its highest and best use.

“Passing this information to your peers and engaging in principled negotiations on areas of spending and management can inform a better budget for both sides of organizations,” he added.

Take advantage of recent budget data. One of the best ways for you, as a manager, to manage the budget process is to take stock of the previous budget cycle. Ask what worked and which projects required more resources.

“Once you have this data, you can move forward with an idea of ​​your operational priorities and see where they may intersect with your budget needs,” Southern Bank Company CEO Gates Little told Gadsden. To the. “With this knowledge, the budget leadership team knows that regardless of the numbers, they can see which projects are the highest priority for the business and budget accordingly.”

Be prepared and organized. Jeanne Hopkins, chief revenue officer at OneScreen.ai, a Boston-based digital ad company, recommends being a “good partner” with the finance team over an entire year. This means being organized and treating the budget process with respect.

Hopkins offers three tips for winning a company’s budget battle that any manager can adopt.

Always submit your travel and business expenses in a timely manner. “Nothing bothers a finance team more than the inability to accrue monthly costs,” Hopkins said. “Get six months worth of receipts [all at once] is painful for them and earns you a terrible reputation.”

Speak regularly to your financial managers. Schedule monthly meetings with your controller and quarterly meetings with your CFO to review your plans for your department: hires, programs, investments in your team or software.

“When financial leadership is part of your planning process, it knows you take budgets seriously and will give you more flexibility during negotiations,” Hopkins noted.

Know where your budget leaks are. If you consistently go over budget for programs, events, and tools, you may have a budget negotiation problem.

This is why it is essential to focus on every detail of the budget as a manager.

“Even noting that there are 14 harvard business review subscriptions within a company that few use will earn you goodwill with the finance team,” Hopkins said.

Brian O’Connell is a freelance writer based in Bucks County, Pennsylvania. A former Wall Street trader, he is the author of the books CNBC Build Wealth (John Wiley & Son, 2001) and The Career Survival Guide (McGraw-Hill, 2004).

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