Surviving Budget Season: 4 Proven Tactics for Finance Leaders

Video Transcription

Welcome everyone. We are so excited to have you here today.

For surviving budget season, four proven tactics for finance leaders. As you can tell, we are in the spirit of survivor. We kicked ourselves off a little anecdote and we have many more anecdotes to come. We really appreciate you all joining us today.

And, let's let's get going.

Next slide. Awesome. So some really quick housekeeping things because I know these are top of mind. At the end, we will have about a ten to fifteen minute q and a. At the bottom of your Zoom, you will see a Q and A option. In there, you can enter all of your questions.

We will pick through and answer them. But to answer one question I know many of you have, yes, the recording and slides will be sent to you immediately following this webinar.

Anything as well as some additional content that we'll be sharing as well.

So given that, I am excited to kick things over to Christina.

Next slide. Thank you, Sarah.

I first wanna introduce my fellow castaway or, co presenter, Chris Ortega. He is the CEO and founder of Fresh FP and A. Chris has a pretty incredible background, and one of the reasons I was excited to partner him with him on this got a deep understanding of accounting, finance, FP, finance transformation, has a similar background in that sense, and we had some pretty, let's call it spicy discussions leading into this. So, Chris, over to you.

Thank you so much, Christina. And it's pleasure and joy to be here with everybody. And, Christina Ross is a former three ex CFO, finance transformation leader, experience, and startups, IPOs, enterprise level companies such as Deloitte, Rent The Runway, and GE, and currently, she is the founder of Q which is a spreadsheet native FPA platform that helps companies hit their numbers. So Christina and everybody, thank you so much. So happy to be part of this, webinar.

Alright. A little bit about the agenda today. So tell him what you're gonna tell him. Number one, we're gonna talk a little bit about delayed budget cycles.

This is one of the horror stories, but we're gonna share some of our own horror stories. Why does it happen and what to do about it? And the title of this presentation is around the four tax tactics. So it's plan to work, work the plan, partner on the plan, and present the plan.

And then we'll close a little of it out, with q and a and also talk more about additional resources for everyone here.

So, we gave some housekeeping items. We talked about the agenda. Just wanna get a temperature check for everybody. How's everybody feeling about budget season right now? I know we're at the end of September. Some people may just be kicking things off. Some people may be weeks out, but we're gonna do a quick poll and see how are you feeling about budget right now?

Alright.

Cool. Looking at the looking at the results, I think we had fifty nine percent of people feeling good about it. Nice. That I I love that because budgets shouldn't be like this terrifying activity.

So that's really, really good results. Fifty nine percent, thirty, seven of the attendees feel feeling good about budget. That's awesome. Next.

Alright. Before we go into it, I'm I'm glad it's the only two percent. We're downright terrified, but we wanted to kick off with some horror stories, of our own. You know, I personally have two recurring nightmares.

One is around the process that never ends. It's like the song that never ends where you start something, your team needs a new template, you send it to them, wait, actuals are required, What was the date again? What's the version?

This is sort of like the process that ends up taking six months? How many iterations do we go through? We'll talk about this when we plan the plan to make sure that that doesn't happen. The second horror story that I've experienced again my recurring nightmare, these are all things that have unfortunately happened.

Is going through an amazing budget cycle and finishing it all only to find out that we never went through our strategic planning exercises and had to start over from scratch Finance did the job, but the company never went through the planning cycles required to figure out what we need to build into the plan. Chris, how about you? Yeah. I think a number one horse sword that comes to mind to me, and I got kinda got, like, chills going, down my back right now was I was in a high growth SaaS business, and we started our budgeting us in August.

So we were pretty early. It was like, soon as the summer was over, it was like, we gotta get into budget. I'm like, we just got done with half of the year. Like, how are we gonna think about a whole another twelve months?

And we jumped into it, and this was a very complicated budgeting process. We had a lot of different stakeholders We had bank covenants that we had, and we had a big audience that we had to get through. So, ultimately, this budget took us from August and I'm no kidding, to the week before Christmas. We were working through Thanksgiving, we were working throughout the end of December, and it got to just be a point where we're just like, can we just get this thing done?

And we ultimately get the budget done. We get it submitted to our investors. We get it submitted our bankers, we get it submitted to everybody. Everybody's all bought in.

And then we go through Christmas, we go through New Year's holiday, and then coming at the first of the year. Right? Everybody was just like, what what do we do now? And we did all of this work, all of this time, energy, effort, and capacity, and intelligence that's thrown in this document, and we quickly realized outside of January, our first month of actuals in the new year that this budget that we spent all this time on was completely irrelevant.

And this was a moment where I was like, we can't go, like, I don't I don't wanna go through this again, and I don't wanna take my business partners through this again. We have to find a way that we make budgeting not such a labor intensive draw now process. So for me, like, being in budget for like five months and working through holidays, That definitely, it was a horror story that I like to share. Yeah. For sure. That was tough.

Next slide. By the way, Chris, that's why we love the January fiscal year around here. January fiscal year end saves saves our holidays a little bit. Alright.

Most definitely. Next polling question, what do you all think attributes the budget delays the most. The first is the finance team doesn't set the department heads up for success or doesn't set up the team for success. Number two, competition between departments starts, you know, let's Rob Peter to pay Paul.

This person got more budget or not. Maybe that's what delays.

Third is maybe the data isn't ready. It's siloed. It's not accessible.

D is maybe there's a lack of mode because it doesn't align with the right goals or e is something else.

We'll give it a few more seconds.

Have a little think.

Get to the polling.

Alright. What are the results? Oh, this is all over the map. It looks like the leading contender here, yeah, is data is not accessible.

A little bit of not being ready. Finance doesn't set the team up for success. And then a little bit around budgeting doesn't align to overall goals.

Oh, thank you folks in the chat here. Some other explanations takes forever to align on priorities and strategies a hundred percent. That's one of my recurring nightmares. This is lack of motivation on the on the fourth one here, but budgeting doesn't align to goals.

Lack of clear OKRs.

You know, I'm glad we have some consistency here. We're actually gonna have a slide around this.

Finance does its modeling, and then departments do their own modeling. So a few different answers. Alright. We're gonna cover a few of these things.

So thanks for sharing all this in the chat. Alright, Chris. Back to you. Yeah. So for me, it's it's interesting to see some of those, data silos.

Right? And I think to me, when you think about the delays that causing budget. Right? I think the first element I wanna talk about is so many times in finance.

Right? We focus on this precision versus accuracy. We play this balance in this dance. Right?

And what do I mean by precision and accuracy? Right? When you think about the next twelve months in a budgeting process. You one thing you have to one thing I always said with business stakeholders and always said with my team, budgets and forecasts are inherently gonna be wrong.

Right? So when you focus on precision, right, which is that ninety five to ninety eight percent confidence interval and what your numbers are gonna be versus being directly directionally accurate, right, which is like that sixty to seventy five percent that we're gonna move in the right direction. I think too many times in finance organizations, one of the biggest delays is you're trying to be perfect in everything. Right?

You're trying to be perfect when you time the head count. You're trying to be perfect when you're, getting your capital investments. You're trying to be perfect in your different drivers. So think one of the most important things to to focus on is how do you balance that precision and accuracy.

Right? And then we talked about in the survey result point number three that is siloed in zero collaboration.

I don't know about you, but in leading high growth, SaaS businesses and then also working in FreshF P and A working with our SaaS clients, you'd be surprised how much data is siloed. Like, marketing holds their data. Sales holds their data. HR has their Gusto or other tools that they're using.

Operations maybe has this, like, excel document that they manage for, like, ten years that gives them all their KPIs.

So bringing the departments together and breaking down that data silos as we've seen from the poll questions That's a big, big problem. A big delay in budgeting is because a lot of times, we maybe find this as first time seeing that marketing data. Right? And you're trying to make sense out of it and marketing sends you this spreadsheet and they're like, hey, this is how we manage the business. And you're like, this this gives us no information at all. So I think that zero and silo data piece of it, that's probably one of the biggest delays.

And then ultimately, one of the, other delays is the lack of out comes, right? Bringing that connection to here's what we're doing. Here's what the KPIs measure. Here's what the results are gonna be and how to translate that through the business. So For me, I think these are one of the top four elements that help delay the budgeting process.

Christina, I'm on I'm on mute. So what can you do about it? There's we've all kind of agreed that there are a lot of the same problems. So when we go back to our four tactics, we've got plan to work, work the plan, partner on the plan, and present.

The first piece is plan the plan, and we're gonna talk a little bit about how you set yourself up for success about doing the work before the budget process starts. The second piece is actually doing the work. So some of that is the pre work, the data piece, that seems to be one of the big challenges, getting that all in place, setting up rules of engagement, which is an incredibly important part of the budget process, and then finally going through the partnership stage. One of the last pieces though that a lot of people neglect to get into places that final presentation. It's so important that this is the FP and A or CFO or finance team's time to shine and sometimes the only way to get buying an approval is to make it accessible and understandable. So the presentation is almost just as important as the work itself.

Next slide.

Alright. Let's talk a little bit about plan the work. This was actually an idea that came from Chris, which is a pre pre mortem. So for any of the companies out there that are doing budget cycles all the time, which in theory, we should always be reforecasting and replanning we should always take a look at the last budget cycle and ask ourselves what went well, what went wrong, and what can we do better. So we're on this cycle of continuous improvement.

After the pre mortem, of course, comes the post mortem, but before you get started, think about how do we run the process and how can we do it better this time? The second piece identify your key business drivers is a lot more neglected than one would typically think. Oftentimes, I would say business leaders, maybe it's a CEO, maybe it's the board, maybe it's the street, can't come to terms with what are the most important business drivers. If you throw all of your metrics out there, sometimes you'll get conflicting advice.

I want cash to look like this, revenue to look like this, productivity to look like this, headcount to look like this. Sometimes those key business drivers are in conflict with one another. So the best thing to do is align on call it maybe five key business drivers and get alignment with your strategic stakeholders, with your CEO, with your board. Before kicking off the budget process.

That allows your bottoms up to at least loop into a couple of different scenarios on the business drivers that make sense.

The third one is rally your key players. This is really about building a team, and it's not your finance team. It is your budget team. So make your other stakeholders feel a part of the process.

Create a SWAT team. Make it fun. Throw a survivor logo on it. Get other people invested in the process the way that you would get your own finance team invested.

Make them understand that this is about doing what's best for the whole company. And you need their buy in to get the same results, with their support. And then finally, I love love love a good documentation story.

Align around a planning calendar. So don't leave deadlines up to interpretation, actually build out a planning calendar of what happens at what stage, what fiscal week, many iterations of the budget cycle are we gonna have? So no one's asking how do we do this again? You can point them back to the same document.

I'll go through this quickly. I think most of us are probably familiar with this. What most of what we're talking about here today is either an annual budget or an ongoing, call it biannual or quarterly re four costs. How do we do this faster? And budget season this time of year is typically for our annual planning. So we're gonna focus on that today.

Alright. A few tips for creating a planning calendar. First thing we wanna do is align all of our key stakeholders. And yes, by the way, everyone, we share these after the presentation.

Assess and identify who are all the key stakeholders in the process, understand those key metrics like we talked about and what are the overall goals for the company?

Number two in building that planning calendar is to actually structure your monthly timeline other activities, and we've also provided a template in a link here that you can use. The third piece here, is develop that plan and calendar, actually build it start to facilitate some of those meeting reviews, put dates on the calendar, and then finally review and approve the calendar with the team and make sure you've buy in from everyone there.

Training is grossly underrated. I found in my experience and in other companies. You can't just expend everyone to get on board. Doesn't matter if you told them last year, last month, or last quarter.

Everyone forgets because we're the most excited about finance here. We need to continually get buy in and training the rest of the business. So don't be afraid to train, record it, train train again. And then, of course, monitor an update has to happen continuously.

So now that you've planned the work, now it's time to work the plan. I think one of the most important highlights on this slide right here is all the different budgets and forecasts and analysis and three year, five year models that I've done and worked within businesses, I think one of the most important takeaways from this slide is really finance should be the project manager. Right? Think about it.

Think about the budgeting process and think about like a project manager role. Right? We're helping to manage the the HR data. We're helping to manage the marketing data.

We are really the stewards of that project management. So A lot of times when I will be successful in budgeting, I would take it as a project. And I'm like, okay, I'm gonna be the facilitator in project managing in this. Right?

So I think in working the plan, that's one of the most important roles that finance has in the budgeting processes. Like, we have to be that connective tissue from the business, from, you know, the business to the outcomes, right, and taking on that project managing hat and looking at it from the lens of a project to manage through finance along in partnership with the business, that can really set you up for success.

Next slide.

And I think here's a great, simplify template as Christina mentioned, there's a lot of information we're gonna give you after this, but this is really where you can kinda get into that tactical planning process of Right? This is where you can go through and identify those tasks. Who's gonna be? Who's assigned to what?

When is the start date? What is the status of it? That way, you can kinda get that holistic approach. Right?

And you can give this to the business. One of the things I would always work with inside the business, so I would always give project plan on the budget of what we're gonna do. Right? And I will have the high level project plan for the executives, and I'll have the more detail for when I'm working directly with my business partner.

So This is just a quick template that if you wanna get into that tactical execution of that project plan around the budget, this is a great framework that you can use. The next one, Yeah. The next one you can look at or the targets that you wanna align. Right?

And I like this presentation because it kinda walks through first half of the year. It walks through second half of the year. Right? What are the targets that you're setting out for?

What are the actuals? What is the actual variance that you're looking at between? I think also you can add to this. I always looking at comparisons.

Right? So if you're doing a budget and you're tracking your monthly target to actuals, how's that compare to prior year? That way, typically, when you're dealing with the CEO or business owners or founders, they're always gonna ask where are we at today? How does it compare to what we say we're gonna do?

And where were we at last year? You already answered all of those questions in a pretty quick, template guide. So this is a great way to be able to measure those monthly targets and get kinda some of that variance information. Next slide, please.

Alright. So the next piece is how do we partner on the plan? One of my favorite tips is to do a rules of engagement doc. Make it a fun name, but rules of engagement are all the same questions you get every single time you run a budget process. Does my budget roll over?

Where do I find things? Who's in charge? Who approves?

Why can't, why don't you just give me the number I need to hit first? Any FAQs lay them out in a document first and get buy in from everyone on this is how it works and explain the why. Here's why budgets don't roll over For example, we already reallocated the funds, and this is why we do it this way. So you're not constantly reeducating people over and over throughout the budget cycle.

You do it all upfront. The next piece around partnering on the plan is three Cs. This is another great, let's call it criticism, collaboration connection and clarity around the budget and supporting documents. And along with the enablement and not enforcement piece, this is really about a couple things.

Number one, I think that constraints breed creativity.

So when you're looking for enablement versus enforcement with the teams to partner on the plan, building a team of this is our budgeting team bring the key stakeholders into the process and offer the opportunity to get creative around achieving your goal. So let's say, for example, you wanted to open up a new market There's not really enough budget to do that. What are some more interesting and creative ways could we do it? Could we start by, I know acquiring a company probably isn't cash insufficient, cash, doesn't use too many resources on the cash side, but maybe that's one option. Maybe it's about, working with a single partner in another region. So this is where you can start to ideate with your business partners on more creative ways to conquer the plan.

Alright. The next piece is around aligning around business drivers and company goals. This came from a lot of folks in the chat today. Is something I've personal experience with as having done it the wrong way and having had a recurring nightmare around it.

My team built an entire budget only to find out that the whole company didn't really know what their goals were. So part of our role as finance professionals is to make sure that our company planning cycle includes strategic planning. So if the executive team has an off-site or your planning team has an off-site, make sure that that happens before the budget season kicks off. And make sure that's part of your planning calendar.

We've included a smart goal template here. This is sort of what we use at cube in terms of OKRs, but those are a great way to line on the next fiscal years old before you get started on planning.

Okay. So you've planned the work You partnered on the plan, you execute it on the work. Now, as Christina mentioned in the agenda, this is our time to shine. Right?

We plan the work. We partnered And now this is for us to to get in front of that arena and finalize it. Right? So I think one of the most important takeaways that I've always had from the budgeting and tying this back to that horror story, right, is we worked through August through the week before Christmas, right, and we got this budget done.

But We got back from the January. We all got back from, you know, New Year's. We all rested. We're all rejuvenated.

We're all ready to get after it. And we're just sitting there, like, what are we supposed to do next now? Like, what's the next thing we're supposed to do? This is a critical critical mistake.

A lot of finance organizations take. Right? You treat it. You're done. The budget's out the door.

You're happy. Everybody's happy. And you kinda put that up on the shelf to not talk about it until you get that first month of, like, budget to actual comparison. Right?

And then you're like, it's widely out of control. So one of the most important things that you can do as that project manager inside of that budgeting process is connect to people and say, okay. This is the process that we've got done. Here's what the next steps are gonna be.

Right? Maybe at the beginning of January, we'll have a, we'll we'll sit down with leaders and we'll go back through and realign a, like, where are we going How are we gonna get there and what we need to do? Right? And you maybe have that refresher where everybody's like, okay, I'm back.

I know what our bookies targets are. I know how that's gonna drop to revenue. I know that how that's gonna drive to, you know, cash, how that's also gonna go drop to net dollar retention. So I think one of the most important things is to not to treat the budgeting process as a hard exit, right, where it's just like abruptly ends, it should be the kickoff of a whole another phase of just continuous feedback and making sure the business is aligned to that.

So I think communication inside of this particular phase when you're presenting the plan is so important. Right? And this is gonna highlight probably, I think one of the most important skill sets that finance professionals need for the future Right? It's getting outside of our calculations and being great communicators.

Right? If you wanna sit across from that sales leader or that marketing leader, you wanna talk and you're communicated, like, hey, your plan for revenue is, like, three million dollars and that's thirty percent year over year and you need q one to be this, they're gonna be, like, No. I'm I'm I feel like I'm talking to Chad GPT, right? No.

Communicating and connect with them and say, hey, sales. Here's the levers that we have. Here's how I wanna partner with you. Here's how I'm gonna communicate and post information to you of where we're going, how we get there and what we need to do.

So presenting the plan out of this culmination of this whole exercise, this is where finance shines.

Next slide. And how to present the plan, we kinda gave some mock ups here. Right? Traditionally, you can lay it out in a lot of different ways.

I think on the right, what you will more see is more of that executive, that CEO, that C suite persona. Right? They quickly wanna get information. They don't wanna, like, I I don't wanna know the accruals that we booked, then The variance is missed because of accruals.

Like, I wanna know high level. And then off to the left, this is where you can get into more of that detailed framework of it. Right? You can get into looking at different slices and dices by department or maybe drivers or maybe scenarios that you're looking at.

And this is where I think technology becomes a huge, huge bonus for finance and FP and A teams as they manage that communication and then you manage to the tracking and reporting in that budgeting process. So these are just some quick snapshots, or directly, from cube to show you how to actually do that.

Thanks, Chris. You know, there's another piece that, on the presenting the plan that I always share with my finance leader is a lot can be said about using words on a page. Sometimes even if it's numbers, our role as finance professionals is to share the narrative behind the numbers. And so oftentimes, I will do a couple pages of just notes with a few pictures before I actually get into the real numbers to set the stage.

One of the things that I'm particularly passionate about of course is using technology to accelerate this process. In fact, I loved it so much. I started a company around it. Wahoo.

But there's a few different areas that you can use software for, whether it's cube, other platforms to accelerate your planning process. Thing I always advise people when they're buying software for anything, whether it's finance or another part of the business, is what are your pain killers, not what would be nice to have but what are the areas you're spending most of your time that is not value add? Most of the finance leaders we talked to, of course, say that the management of data consolidation, unification is the most painful piece. That's what tools like cube can help with. There's of course also the collaboration piece and the ability to help scale things faster. So there are tools like cube or there's also some really amazing things coming out now with AI, particularly on Microsoft co pilot. Chris, I know you've had a few interesting posts on things coming out that can help you accelerate some of your planning cycles.

Yeah. And I think just to add to that, before we go to the next slide, I think it's really important to add like, how technology helps compliment us. Right? Like, when you think about the the value proposition and finance to the business, right?

I don't know about you. And Christina, and and feel free to anybody in the chat. I've never had a business partner sit across from me and say, Chris, that was a awesome forecast that you just did. Right?

Like, nobody's ever told me that. Right? And where technology kinda helps is to bridge that gap. Right?

It could be technology could be like that middle ground where you're working with sales, you're working with marketing, you're working with finance to be able to drive that cohesive centralization of data and clarity and collaboration And now it's a central platform that we can all use that is helping us drive insights. So that's just another thing that hits on that collaboration element. I just wanna highlight.

Okay. So, we're gonna get to our final polling question. What are some of the biggest mistakes that you've seen companies make in the budgeting process. I'm curious to know this from people. I think this is gonna be a very interesting call to see.

You know, we talked about it a little bit for what are some of the things that hold budgets back? What are some of the biggest mistakes you see? Businesses or some of the mistakes that you made in the past?

Really curious to see the the results from this poll.

What's your biggest mistake, Chris?

My biggest mistake is, I would go back to that precision versus accuracy thing. I think too many times I spent too many cycles trying to be perfect in things and just wanted to get that that ninety nine percent confidence when I'm just like, I should have not done that.

Falls precision is one of my favorite terms.

Oh, it's kind of split. So making it instead of collaboration, setting setting it and forgetting it. Yeah. We talked about that. Right? That's interesting that those two are the ones that kinda rise to the top and it's kinda evenly split amongst the, the different, mistakes that have been made.

Alright. Last, last piece here. What not to do when rolling out a budget? We just want some things over some things to do, few things not to do.

First is don't forget the budget in your decision making. Don't forget to account for holidays. So when you're planning your plan and you're planning your calendar, holidays are a big part of it. I love a January fiscal year end.

If you're mid year, even better, but oftentimes budget season falls right smack dab in the middle of holidays, Thanksgiving, Christmas, Ponica, new years, all of those things, make sure you account for that. And even if your finance team is in the office, your stakeholders may not be. So it's really hard to pin folks down during that time period. Number two, don't forget to define what done looks like.

I've often said or often heard there's done and then there's done done. So I've seen budget cycles the last five percent drags on for two more months because we don't kinda know how to make it really actual. Okay.

Henceforth, this is the final version of the budget. How do we declare a so?

You know, I can go into how to make that a little bit formal. It's around communication. We can go through some different examples, but don't forget to label or let people know in advance of the process what done, done actually looks like. Chris, Yeah.

I think for me, it kinda talks about the two themes that I I kinda share. Right? I don't set it and forget it. Like, the budget process is a continued conversation.

Right? It's always gonna be an evolution.

A lot of times in businesses, it starts from the budget and then you move right into that rolling forecast. So Don't just set it and forget it. Set the expectations that we're gonna continue to discuss this and continue to have a conversation about it. And the last one, right, is what we talked about. Balance, precision, and accuracy. Don't try to be perfect.

And don't have it. Don't try to have the perfect model, the perfect everything.

Right? You wanna have your budgeting be flexible and agile. You wanna have those cases that you bring that flexibility inside of that entire process. So I think my two wins is don't set it and forget it.

It's gonna be a continued conversation and a continuous process and balancing being perfect in all your different measures now. There's certain things you gotta be perfect at. Right? There may be covenants that you have, but make sure you're balancing that precision and that accuracy throughout the entire budgeting process.

Those will be my two, don't dos and, rolling out a budget.

Just one thing. So we had to have one debate in this entire conversation. And I will say while we don't wanna get caught up in perfect, the one time I have gotten in trouble for saying back of the envelope is good enough for this planning process is when it comes to commissions, or dealing with salespeople.

So then they're gonna wanna know every single specific penny of their commission plan and reconciling that has to be done to the dollar. Otherwise, they will be pure in an office at your office. And if not, they'll be calling you on the phone. So I will say, I I do agree most of the time you don't wanna be perfect, but oftentimes when it has to do with salaries or people's commissions checks, you do have to be a little bit more careful.

So maybe get yourself another analyst. Great. Great point, Christina. Yeah.

Last slide, we had a resources slide, I think.

So before we get to Q and A, maybe Preston's gonna put it up on the screen. We've got a few resources for you. The first is we've got templates templates galore. So we've got your own financial planning planning calendar template for you. On the link, we will send out this deck after the presentation.

You can sign up for a newsletter with lots more fun tips and tricks and questions.

Also become part of our community. I think it's six hundred plus strong now in Slack. We've got a it's for cube and non cube members alike to debate all these fun topics and talk about things and look for resources. And finally, if you're interested in FP and A software, know a thing or two about it. So check us out at cube software dot com.

Alright. We get to move on to my favorite part, which is Q and A. We got a lot of really awesome questions in. So, if you're able to stick around for all of them great.

But, thank you to the to the folks that that jumped in quickly. And David, you were the big winner. You were the first person to submit your question. So I am going to ask yours first.

Chris, Christina, how do you get business partners engaged in budget planning?

It I'll start by saying it doesn't happen automatically. And I remember my first non big company corporate finance job where people weren't, I would say, accustomed to listening to finance. So I just assumed that they would engage in the process. Like, hey, finance told you to do it. You guys gotta get involved.

I would say that the most important thing is to make a thing out of it. Make it whether to make it fun, you make a presentation, make it a project, give it a code name, operation x y z, make it a thing that people can rally around. If it's just the budget process every year, that's certainly a way to do it. But to get people to really rally around the cause, you basically have to create a SWAT team.

And make each of those budget owners a member of the SWAT team versus financing. We're the team, and you guys have to do what we say. I found it's much more effective to get them involved that way. Again, all of these pre mortems, planning templates, presenting it all upfront with the training really helps to get people on board in a way that's much more participatory and collaborative rather than just following instructions.

Yeah. And and if I can just add, I think getting your business bought in on the budgeting process starts way before the budgeting process. Right? One of the most important things that we need to establish as finance is trust with the business.

Right? We need to go be building great relationships inside the business first. Right? Then that makes the modeling, that makes the forecast, whether that's good, bad, or you know, in different forecasting that you're doing, that makes that process a lot easier.

And I'll give everybody one tip. If you wanna go build trust inside the business with your business partners. I'm asking this one question. What challenges, opportunities, risk, or frustrations that you have in your department and how can I help you solve them?

That is the number one question that you can ask to go build trust And when you build a trust relationship with business partners, when you get in the budgeting process, now it's fun. I've done budgeting processes with my VP of sales. And we've gone and we've had a whole hour. And we've taken the team out.

We've done, you know, bowling and pizza. And we talk about budget in that same process, and it's so comfortable because earlier on, I've already established trust in the business. So go establish trust first, that would go establish trust That makes the whole budgeting process a lot more easier with your business partners.

Awesome. Thanks both. Moving on, Kirk, asked, what is the best way to distribute budget templates and allow reviewers access to review the templates without having, like, multiple cop these multiple iterations. What's your recommendations?

I'll kick this one off. Use queue. Easy. Done.

If it and if you're not a cube user, Google Sheets is versus Excel, you have to use something that's collaborative that has Virgin and Control. I think that's one of the biggest challenges. We all are very familiar with the version seventy five x final, but making sure they all have the same version. Again, I'll go back to the same thing about setting up rules of engagement and having a planning template deck that you send out to everyone in the in advance.

So here's the timeline, rules of engagement, etcetera. It can also have links to specific team budgets that you can have password protected on. But if anyone asks to remind me where the budget is, what's the latest version? Go to the deck the link to that version is always in the deck.

So that's one way to always keep them to the deck and then the links in the deck can change.

And I would just add to that too. Queue is obviously you wanna have all that centralized in a platform. Right? Other ways that I've been able to do it is I've kept like a library like, a a link library to everything.

It's it's almost like a like a narrative of a book. When you look at a book and you see the table of contents, right, we're able to have that directly in there. So it's like the link directly to it. You got some commentary.

You got some what changes are around it. And it's been really helpful for me. When I haven't had a centralized platform, that way I'm almost like tracking exactly where we're going. And you're able to share that collaboratively.

I've done it in the word document. I've done it also in sale, but you wanna be able to have those different milestones and like, okay, we did this version three point five, but what was three point five? Who did it? When was it done?

What was the outcome from it? Almost keeping like a table of contents around, your different budgeting plans and versions that you have. That's been really successful.

Awesome. And I really like this question.

It it pertains to timeline, which we we covered a bit, which is, in your opinions, what's the right amount of time to allocate for the budget process so that the data, presentation, and execution doesn't become scale in the process.

I think you can al a good rule of thumb is you can allocate about thirty days to hear me out. There it it goes up and down depending on the size company. If you depending on the number of layers in your organization. So, obviously, if you're an organization that has managers and managers and managers and managers, it's not gonna take two to four weeks.

However, for each layer of management, you can add another week or two to that process. So if you're an organization that has department budget owners that go three levels deep, you would add another three to six weeks to that process. So you could do between one and two months. Again, this is if you execute properly with a calendar seen budget cycles get done in as little as three and four weeks if executed perfectly, but generally a month is a good guideline for a single for a single budget owner organization as you scale up another one to two weeks per level.

Yeah. I think for me, I this is always a difficult question because it there's so many variables that go along with that. Right? I think one of the biggest variables that we work with clients on is if we're going through the budgeting process and we know that outside of q one in the next following year, we're gonna already be updating our rolling forecast that we're doing, We already know we're gonna revisit.

We're gonna revisit the business as we're tracking towards that. Right? So we don't spend a lot of time. When I say we we do, like, thirty to forty five days of a budgeting process us because we know outside of q one, we're gonna reforcast the business.

Now if you add another business where the budget is to say, y'all be all end all in your gonna go back and do a forecast, then yeah, you wanna be spending a little bit more time. But back to my horror story, five months in a budgeting process is way too long. I would not You wanna probably keep it somewhere between that thirty, ninety day max depending upon the business. But again, there's a lot of variables that go along into But, typically, you wanna keep it in that that kinda, daily window between thirty and ninety days.

Awesome. And we're we're going on the the four last four minute mark. So I have a few questions that maybe we can fit in. But the next question is pertaining somewhat similarly, which is how do you keep conversations during the budget process on track.

So a lot of the times people have early conversations that derail a ton of things. Like, what if we did this How about this? We can't do this. How do you keep those conversations on track so the budgeting process doesn't become this five month exercise?

Yeah. I think for me, one of the ways I've always done that is in the collaboration with the business or even with the executives, I always cover like, hey, here's how we got to where we're at now. Right? So I always have like a five, you know, two to five minute debrief of like, here's the things that we got to where we need to go.

Right? And you're gonna it it is you're it's in a budgeting process. You're gonna have those tanges that you go down. Right?

You're gonna have those different things you wanna dive into. And I think it's important to have that inside the business. Right? But when you're taking too many cycles and you're going through the same conversation, ultimately, you gotta be able to make that decision, right, saying, hey, we We've looked at four different scenarios.

Here's the one that we're recommending. I know we wanna, like, look at, we wanna go to scenario eight. Right? But at the end of the day, you you get to a a a inefficiency that you're doing.

So no matter how and again, it gets all back to You could do twelve different scenarios. Right? And probably those twelve different scenarios are not gonna be a hundred percent accurate to where you need to go. And that gets back to anchoring people down to say, Hey, spending that time to do the different scenarios, the different analysis, but also balancing and saying, look, we can we can do scenario and analysis to her to her blue in the face, we gotta make sure that we're focusing on the right things and balancing.

That's where I think that precision and accuracy becomes hugely important in that process. So allow that time for that extra discussion, but also when it's getting to where any efficient of not only the finance time, but also your business partner's time, that's where you can anchor it back down and say, here's where we're going, here's where we need to get there, here's where we need to be precise.

Awesome. And, Mart has two sort of interconnected questions.

Number one, could you share your experience in diminishing or eliminating data silos within your organization? What principles or tools did you use? And then part two is in the context of where the finance department is the data connector, How have you insured in your roles that biz the business retains state ownership and accountability?

I mean, this is a meaty question that is probably longer than the minute to answer it. I I always go back to the leadership when it comes to data silos. Who's in charge, who are the different owners across different departments, and how do you work to make sure that you that multiple executives are aligned on who owns the data and who is responsible for data cleanliness. I think we all can agree that data capture is one of the most important parts here.

Garbage in garbage out garbage out. So making sure you're aligned with the other executives who own the data. So let's take an example pick on sales for a second. The data that goes into Salesforce has to be clean in order to perform all of your wonderful types of analysis on Salesforce data.

So you need to be aligned with the sales leader on who owns data cleanliness and, if there are issues with data cleanliness to work with those you know, individual sales leaders and find a way to hold them accountable. Is it part of commission plans? Is it part of the executives' comp? To make sure the data is correct, or do people just not get paid until the data is correct?

There's different ways to hold them accountable.

Yeah. I think one point about breaking data silos and and the client we work with a fresh FP and throughout my career is getting to the root causes of why the data is siloed. Right? There had to be a root cause of why.

Right? And typically, that's what we like to deep dive into it and say, like, why did marketing feel like they needed to keep this marketo system that doesn't connect to anything? Like, What are the root causes for it? And that's where you really intimately gotta learn the business, right?

Learning the business, learning why marketing did this. What do they do it for? How did they do it? When did they do it?

Action those questions and getting to the root cause of, like, why the silo was there can help have a better relationship as you can move that away from it. So to me, get to the root cause of why there is a day of silo in any of one of those respective departments. That would be my best tip to to do.

Awesome. And I'm going to hereby say that we're gonna go a little bit over. We have two more questions. So I'd really love to get through them. Thank you again everybody for for submitting your questions. But, from Robert, what advice do you have for new own organizations going through their first budgeting process?

If you have the time and the support from leadership. You might wanna do a zero based budgeting for this one to start over from scratch. I'm going to make some assumptions here. Typically, if it's PE owned, trying to become a little bit more efficient, you may be taking over for another leader. Maybe that former leadership team was less efficient. So if you have the time because zero based budgeting does take longer, it might be worthwhile to do that exercise, which then leads into, of course, what does it take to do a zero based budget, more planning upfront? You can still execute it in a reasonable amount of time, but it's gonna take a little bit more training, a little bit more planning upfront, but it can still be done within a reasonable window of time.

Yeah. I I've been in this situation before in in PE or VC backed companies. Right? And you're working through that first budgeting process.

Work with the PE or VC back company. Right? Because a lot of times you can go in, you can create all these different things and you get it to your PE or your VC back, owner, and they're just like, this isn't what we wanted to see. So I think as you can work alongside of that private equity or Vc, like, partner that you have of, like, hey, what other portfolio companies?

What is everybody else doing that you like? Right? What what do you like to see? What do you expect the and then that way when you ultimately work through that in the business, you're working towards the ultimate outcome you wanna have and announce more collaborative.

Right? Finance is working with the business, and then finance is working also with the PE firm. You have everybody going through that process the first time together. And you're helping leverage what already went right in their portfolio of companies that they're working with.

That way, you don't have to you're not actually starting from zero. You're starting from a baseline of what they expected and what they see success be in their other portfolio companies, that will be that's a great, hack to be able to have when you start your first budgeting process.

Awesome. Great question, Robert.

And then finally, Daniel asked, what if your budget is seen as a kick box exercised by the business. How do you change that perception within an organization?

Thank you for me. Oh, go ahead, Chris. Yeah. For me, when it's when it's the tick box exercise, right?

Then it's like, okay. What what is if it's a tick box exercise, what is the intention of Like, what are we trying to do? Like, if it's just to check the box for what? Is it to check the box so our board feels happy?

Is it to check the box so the CEO feels happy? Again, I always like to get down the root causes of things. Like, why is it a checkbox exercise? Is it just because that's always how it's been?

Understand that narrative first, right? Then you can go through and say, alright, if it's been a checkbox exercise because this is how it's always been, because maybe that CEO hasn't found value in working with finance on it. Right? They're just like, oh, it's a tick box because I just never found value working with finance.

Right? So understand those root causes. Right? Like, what is driving why it's just a tick box behavior and how you can begin to change that?

To me, I think that's really, like, getting to the core of it, then going back and having those elements in there, if it's missing a value, if it's missing because they were always in they were always wrong by like forty, fifty sent. Understand what those frustrations or pains were before, then you can go about, you know, addressing them in a collaborative budgeting process.

I I would say that finance is still going through a rebranding exercise as a function. So in a lot of organizations, it's still seen as something that the team has to do, and we wanna change the narrative around what finance can do for the business. And really what we are as finance professionals is we are building the playbook for success, and that playbook comes in numbers, and it comes in the plan. If you wanna do something, you have to have a plan for it, And we are, you know, I say this as a former CFO when I say the the proverbial we, we are involving the whole team and how we build our business to get to the next stage. And these are all the pieces to get us there. So will you join me on this journey?

And getting people on board, you can have your own Rahra speech. But I would say a lot a little bit is about rebranding the role of your team and going out on a little of a cultural row road show across the organization.

Definitely. What a sound bite to end with Chris, Christina, thank you so so much for joining us today. Everyone else, thank you for jumping on the call. We really appreciate it. A reminder.

The slides, the deck, the recording. It's all coming your way. The templates are coming your way. Thank you all so much.

And we'll catch you next time. Thank you everybody.

Thank you for joining. Have a good day, everybody.

Surviving Budget Season:
4 Proven Tactics for Finance Leaders

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