I recently had a chance to pick the brain of our budgeting & forecasting and excel modelling expert, Danielle Stein Fairhurst, about the top three mistakes people make when performing budgeting & forecasting for their business, here’s what she had to say:
- The budgeting & forecasting process often takes far more time than it should. Having good, streamlined processes in place mean that the budgets & forecasts are accurate, meaningful and DON’T take up most of the year! A big part of this is having well-built budget models which can save a huge amount of time.
- Budgets are often used as negative evaluation tools, and therefore are perceived negatively in the organisation. Eg. “We can’t do this project because it’s not in the budget!” In the Budgeting & Forecasting course, we talk about ways to measure against budget in a productive and positive way, and how to create forecasts which reflect the changes in a dynamic organisation.
- There is often not a clear correlation between the strategic objectives of an organisation and their budget. I normally discuss with clients the theory of how the five year strategic plan should be linked to the 12 month financial budget.
Some organisations have a team of people who spend 8-10 months of the year simply working on the budget. Having a good budget process in place, whether using Excel models or other systems, it is possible to cut this time down so that only 3-4 months is required.
If you want learn how to avoid these mistakes and more in your budgeting and forecasting, join us on the Budgeting & Forecasting in Excel training course.
