It might seem obvious – but when your budgeting process engages multiple participants across the organization it becomes as much an exercise in communication as an analysis of the numbers. Multi-participant budgeting works best when budget managers are able to document their assumptions, delineate how these costs align to key strategic objectives, and defend the rationale behind their requests.
This documentation and justification process allows efficient communication without the need for direct conversation – a real time saver in time-crunched environments. It also helps the finance team and management make quick and informed decisions about what to fund and what to cut. And last but not least, documentation benefits the organization by capturing historical data – lessening the impact of turnover and making the transition process easier for new hires.
Realistically, it’s not feasible to have 100 one-on-one conversations with budget managers, and there are only so many group meetings that will fit into everyone’s schedule. While this information could be recorded in a spreadsheet – using and applying that information is extremely challenging…and revisiting the data year-over-year becomes nearly impossible. Leveraging purpose-built budgeting software enables a scalable, efficient method for capturing the data that not only supports the development of a sound, strategically aligned budget – but makes the entire budgeting process easier for the finance team and senior management.
If you want the recipe for this budgeting success we invite you to check out our resources on multi-participant budgeting.