Budgeting best practices is essential for success. It is something that impacts both new and seasoned managers, their team, and their department. Below are some steps to help you in your budgeting process.
Define Process
Budgeting affects just about every department of a business. Defining the process to focus on value-add actions and eliminate waste will help daily operators be more productive. The less complex the process is the easier it will be for those involved with the day-to-day work with it to avoid or quickly adapt to adversity. Associate the controllable and uncontrollable costs with your process.
Infrastructure Review
Understand the resources that supports your process and the cost benefit balance that they represent. The relationship between getting results or not are directly correlated to those involved with the process. Employees, vendors, contractors, consultants, and technology are interchangeable. They all have costs and savings associated with their output. It is essential that they meet your specific needs of your group/organization.
Budget
The financial Budget is usually limited with not much room for creative latitude. Stretching the budget and understanding how to leverage core capabilities and unrealized assets/opportunities can turn adversity into value adds. It is all about your perspective, which is wise to broaden your vision as it will enable you to find more plausible solutions.
SMART Goal Performance Metrics
We all know of Specific, Measurable, Attainable, Relevant, Time-based (SMART) Goals, so why do we not apply these to or metrics? Defining and having agreement on Key Performance Activities (KPAs) with owners of the processes will help you stay focused on the true goals. It is the guardrails in your quest to hit Key Performance Indexes (KPIs) without diluting manipulatable outputs. Be sure to set these KPAs and KPIs with value added behaviors that influence service, time, cost saving, inventory turns, etc.
Strength in Collaboration
There is strength in numbers, it is most likely that problems that you are having are not only yours. Talk with other leaders in your organization to find common issues that affect your respected business unit/department. This approach may result into creating a shared service approach that can stretch budgets, resource re-distribution, or establishing best practices that are not being optimized. Getting input from those that are hands on in the daily operations will also open visibility and solutions throughout the organization.
Minimize Adverse Conditions
Embedding agility in processes will help adapt to adversity along with cross-training employee’s will be beneficial to create more empowerment to process owners. No one wants to fail at their responsibilities, but unforeseen circumstances can arise to knock us off course. Creating checks and balance systems can help and be beneficial for unexpected issues. Think of it as an insurance policy and contingency plan implementing best practices all contribute to an organization’s overall financial health as a byproduct of budgeting process improvement.
Mike DePaulo, LSSBB, CDR
Co-founder
All Pro Recruiting, LLC.
