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How to get off the budgeting Merry-Go-Round

Posted by Taysols on Jun 18, 2020 8:15:00 AM
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How to get off the Budgeting Merry-Go-Round

It’s easy to get stuck riding on the budgeting Merry-Go-Round. Sometimes you can be on it without realising, and months have gone past while you watch the budget get stuck in revision after revision.

 

How do you stop going around in circles?

 

Identify you’re on the Merry-Go-Round

In our previous blog post, we discussed early warning signs to identify if you’re embarking for a ride on the budgeting Merry-Go-Round.

Until you identify that you’re riding on the budgeting Merry-Go-Round, you can’t take steps to get off. If you’re encountering some of the points below, there’s a good chance you’ll be getting dizzy from budgeting soon:

  • One or two holdouts pushing back on small budgetary changes
  • Uncommunicated budget changes by department finance teams
  • Increasing amounts of forensic accounting
  • Budget revision three+ has come back

As the saying goes, “knowing is half the battle”.

 

Communication

It seems simple, but your ride on the budgeting Merry-Go-Round often begins with unclear communication.

Sometimes the “why” of budget changes are forgotten and uncommunicated, leading to misunderstanding, or worse, push back.

Communicating or reiterating the purpose of budget changes can assist in removing budget pushback. Generally, budgetary changes are made in a department’s best interest or to facilitate a new organisational objective.  Keeping key players in the loop of the “why” budget changes can help reduce this pushback.

 

Clear organisation goals

Whether they missed the memo, or don’t understand the purpose or ramifications of it, a weak understanding of the organisation’s goals and vision can be a primary culprit in creating the budgeting Merry-Go-Round.

What one department thinks is in their best interest, may not be the best for the organisation.

Ensuring everyone in the organisation remembers and understands the focus for the next financial year can help ensure the budget is deemed “reasonable” and accepted.

 

Briefing and Training

The challenge of siloed systems and departments can be a key driver instigating rides on the budget Merry-Go-Round.

The confusion and time lost in managing manual processes, making data consistent, or trying to find missing and incomplete information can balloon out the budget process considerably.

A clear, easy-to-follow checklist or brief of the information required will ensure there is little time wasted in back-and-forth communication. But don’t stop there. Letting departments know the impacts that the changes will have on them is of paramount importance as are the implications for not completing the information correctly, including ensuring that validations are cleared and that the financial statements are in synch.

 

Department Integration

Arranging joint budget sessions, run-throughs and workshops are a great way to ensure all key budget players are on the same page.

If your budget process hits a roadblock, being able to work alongside each other allows for rapid and a better understanding of the steps required to resolve the issue expeditiously.

 

Accountability

When errors in the budgeting round-up require forensic accounting to solve, it’s good to know where responsibility lies.

Having the finance team actively document and clearly communicate ownership of the budget responsibilities will help alleviate and solve any errors or inaccuracies that may occur during the budget round up.

This isn’t to lay blame – having well documented ownership will prevent the challenge of backtracking when troubleshooting inaccuracies and errors.  Sharing documented ownership also allows finance teams the opportunity to resolve errors that may occur by quickly identifying who to contact.

Modern budgeting solutions allow for assigning budget tasks and responsibilities to specific users, eliminating the need to “ask around” trying to find who was responsible when correcting budget inaccuracies or errors.

 

In our next blog, we will discuss how you can prevent the budgeting Merry-Go-Round entirely.

If you’d like to learn more in the mean-time about managing the budgeting Merry-Go-Round and achieving budgeting success, download your free Taysols Tip Sheet by filling the form at the the top right of this page.

Topics: Budgeting & Forecasting, Financial Consolidation & Reporting, EPM