We have discussed in this blog a big concept – Explicit Budgets for projects or initiatives. But not every department really needs that degree of sophistication.
Sometimes it’s the small things that can improve communication. Like allowing managers to easily add justifications and detail.
For example, we have a client that has an Administrative Services department, and that department budgets for a lot of things, but one of them is Lease Expense. The head of that department actually use to use a legal pad to list out all her leases and budget for each one, taking into account things like escalation clauses. Then she’d take out a calculator, add these leases up, and type the total in the budget template.
She did this for two reasons, one, she never felt that comfortable in Excel and she thought she might mess something up. And two, I guess the Finance folks had the same concern because they locked down the spreadsheet so she couldn’t use it to list out her lease expense anyway.
Now that situation wasn’t just a mere inconvenience for her. She worried about keeping the budget template updated for changes she’d made to assumptions about individual lease agreements. That created a whole new set of communication problems.
A much better idea is to allow your budget holders to easily communicate the detail they use to build up their budgets, along with written justification. And if you are worried that they’ll mess up formulas by doing so — then you’ve got the wrong budget tool. The right budget tool allows for managers to add line item detail without blowing any links or formulas.