Documentation, Justification & Communication: Key Ingredients for Budgeting to Strategy

Ultimately your budget needs to be a numerical expression of the strategic plan.

At XLerant, we believe the best way to align your budget to strategy is to reach out to the people on the front-lines – your employees!  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.

Successfully aligning the budget to the strategy requires bi-directional communication: top down communication of strategic objectives, financial targets, and key drivers. While employees need to be able to document their assumptions, delineate how costs align to objectives, and defend the rationale behind their requests to senior management.

Realistically, it’s just 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 an Excel spreadsheet – using and applying that information becomes extremely challenging…and revisiting the data year-over-year is nearly impossible.

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 – and makes the entire budgeting process easier for the finance team and senior management.

Leveraging a purpose-built budgeting, forecasting and management reporting solution:

  • enables efficient communication, documentation and justification without the need for direct conversation – a real time saver in time-crunched environments
  • helps the finance team and management make quick and informed decisions about what to fund and what to cut
  • benefits the organization by capturing historical data – lessening the impact of turnover and making the transition process easier for new hires.

Looking for the full recipe on budgeting to strategy with a decentralized approach?

We invite you to check out our resources on multi-participant budgeting.

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