If you’re like most of those who took our State of Corporate Budget 2018 survey, you probably think your company’s budget process is perfectly adequate. When we asked dozens of business owners and managers, we were surprised that more than three-quarters gave their process a grade of A or B, even though they use outdated tools, rarely make updates, and regularly go over budget.
We attribute this mismatch to a certain amount of complacency toward the process. For most companies, budgeting is one of those “must-do” tasks, and it’s all too easy to move on to other priorities once you’re done. But “set-it-and-forget-it” quickly spirals into old data, bad habits, and wasted resources.
We believe budgets should be the tool companies use to put their strategic plans to work. Budgets detail the resources (people, money, and equipment) needed to execute the strategy. But most budgets become outdated quickly, because business needs change rapidly: You land a huge deal after months of work. Or a partnership takes longer to develop than expected. When significant shifts like these happen, your strategy—and your budget—need to change, too.
The first steps in transforming your budget into a powerful strategic tool are to take a hard look at what’s working and what’s not, and to revisit some deeply ingrained attitudes about the status quo. We believe this research provides helpful insights into how budgeting can be better, for companies of all sizes.
In the meantime, we’ll be working with new clarity to give businesses the real-time visibility, clear communication, and strategic insights they need to meet their goals and achieve more.
The next post in this series is Over Your Business Budget? You're Not Alone.