Setting the budget doesn’t have to be an isolated and painful activity for your organisation. If you leave room in your budget to incorporate your strategic goals, you can make budgeting a more integrated and productive time of opportunity at your firm.
The key does not lie in creating a funding pool for strategy sessions, but rather in setting the right mindset going into your budget setting discussions. Your goals and objectives for the firm need to be at the forefront. This includes both short term and long term goals, which can be joined up with budget elements to ensure everything at your firm is driving toward the same objectives.
It can be hard not to get bogged down in the finer details of the budget or even the finer points of strategy without a guide in place to keep things on task. Yet having a reminder to take a more strategic view can provide massive dividends in not just this year but future years going forward. Linking your budget setting with your strategy implementations plans eliminates conflicting policies and frees up resources to truly work toward sustainable growth and marketplace success.
The budget is naturally rooted in short term goals that run on the same term as the financial plan, yet this doesn’t mean it must be cut loose from your larger strategic objectives. Instead, building consistent joined-up zero-based budgets and laying out the specific courses of action that lie behind them can have the net effect of pulling it all together for your organisation year after year.
Initially, it can be an uphill tasking making room in the budget for strategic implementation programmes. One small group of accountants or the FD can’t sit alone setting the budget until the early hours. Instead, the strategic planning group will need to get together to think deeply about how budget drives strategy at the firm and vice versa. The extra time spent can be hard to find going into year-end, but the links between each action and each penny that are drawn make each minute worth the trouble.
The reason is the pure clarity that these connections bring to your operations. Businesses like to talk about transparency and alignment, but this is an undiluted example of what those principles mean in practice. Your budget setting moves from a murky document of spending and cuts to a blueprint that aligns with your strategic map for success. There are no more mysteries as to why such-and-thus gets more emphasis, or why thus-and-so was cut.
By making room in the budget for strategic implementation considerations, your organisation can open the door for the year ahead with fully coordinated financial and strategic initiatives leading the way.