As the end of the year approaches many people think of the holidays and times they will share with their families. Unfortunately, this is also the same time that gets very busy for financial and IT professionals planning for year-end, and finishing the next year’s budget cycle.

Whether you do top down, bottom up, rolling or annual budgets the process can be time consuming for everyone involved. Outside of the revenue and expense budget, it can also be very difficult to set the information technology and capital budget. With changes in technology taking place rapidly and many people shifting from on premise to cloud-based services, this can increase the challenge as well.

Here are a few things keep in mind for the budgeting season:

Align to a strategic plan – It’s hard to put a budget in place without a clear vision of where you want to end up at the end of 2012. Start with the vision of what success looks like, and then determine the financial map to get there.

Set clear initiatives – To achieve the strategic plan, what major initiatives will need to be undertaken, who will lead these, how will they be measured, and what resources will be needed to achieve them?

Create a clear plan to finalize the budget – When will it be distributed for input, how many iterations will take place, when is the target date for final sign off? Laying out a clear plan, and adhering to it, will keep everyone on the same schedule.

Opex or Capex? – When reviewing purchases you plan to make next year, understand if these will be capital in nature, or considered operating expense. Many times cloud based services will be considered operating expense where hardware and significant development costs will be capital expenditures.

Project planning – Although most operating plans become outdated on January 2nd, many organizations adhere to them as a guide throughout the year. I like the motto of ‘Plan the work, work the plan’ as long as all the assumptions still hold. It is much easier to have a project approved as part of the budget cycle, than to incrementally approve it during the year. Take the time now to forecast these projects and include them in the plan.

Insource or Outsource? – Most organizations create their operating plan based on current employee headcounts and hiring plans. As best practice, organizations utilize consultants and contract labor to augment expertise or staff for peak periods as well. Consider these external resources that may be needed and include them in the plan.

Get your planning tool ready – Whether you use Excel, Prophix, Dynamics GP (Excel-Based Budgeting) or another planning tool, ensure this is updated and ready to roll out to your team this year. Has it been updated for new departments, GL accounts, cost assumptions?

Now is a great time to reach out and get estimates on future projects so these can be included in your budget next year. With a detailed budget process it will reduce the time to create and finalize the budget and hopefully give you a well-deserved break over the holidays.

How we can help!

FMT Consultants has a seasoned consulting team with in-depth knowledge of the budgeting process who can assist you with creating a solution tailored to your budgeting requirements.

Contact FMT Consultants today and learn how we can help you!

info@fmtconsultants.com

(760) 930-6400