Fast annual budgeting and planning for an SME

By David Parmenter

If you have taken a position as the chief accountant in a company with less than 250 employees you cannot afford to preside over the debacle that is the annual budgeting and planning round.  The five steps you can make to introduce a fast annual budgeting process are:

1. Get the facts.  The costs of this process will be horrific and what’s worse the numbers will have wrong as soon as the ink has dried and everybody will acknowledge that. Pareto’s 80/20 rule will have been ignored so first find out the major revenue drivers, What products and customer make up over 60% of sales, what percentage is payroll to total costs, in the last year, What dysfunctional behaviours did it promote in the last few years.  There will be plenty if bonuses and or sales commissions are attached to beating the budgets.
2. Understand modern budgeting and planning methods. There is a good  chance both the finance team and the C-Suite will not have been exposed to the new methods that are sweeping  across enlightened companies.  You will need to do the reading and attend webinars or courses.  You will need to know :
   • why spreadsheets are not appropriate in finance if they are larger than 100 rows, involve rekeying etc,
   • why annual budgeting and planning is broken
   • the modern approach to forecasting and budgeting
   • how to use modern one-page templates
   • the myths that surround annual budgeting and planning
3. Selling the change.  There is a special way to sell change properly and fortunately it has been well documented. I recommend you look no further than John Kotter’s work.  You will need to sell this change to:
   • The CEO and the C-Suite
   • The Board
   • The oracles in the business who once on board will help you establish the new rules around budgeting, bonusses, commissions etc.
4. Move to a forecasting tool.  There will be a perfect forecasting tool for your organisation. If you do not know the reasons why you need one I suggest you read this.
5. Implement a rolling forecasting and planning regime that will suit a SME, such as yourself.

The need for more robust systems in finance teams, particularly forecasting tools are further explored in  three toolkits (Whitepaper + e-templates). These toolkits are on sale (over 40% discount).

How to Implement Quarterly Rolling Forecasting and Quarterly Rolling Planning – and get it right first time – Toolkit (110 page Whitepaper + electronic templates)

Annual Planning (Budgeting) in Two Weeks or Less – Toolkit (90 page Whitepaper + e-templates)

To look inside the toolkit  and   buy the toolkit