The benefits of embracing a team approach to budgeting are extensive. Successful multi-participant budgeting leads to increases in innovation, accuracy, engagement, and more. Rather than finance teams wasting time trying to track down spreadsheets and fix broken formulas, they can focus on analyzing the data and making strategic decisions about the organizations most valuable resources.
Luckily, multi-participant budgeting doesn’t have to be a complicated process.
The following are five proven strategies and tools for bringing your team together and building a better budget, no matter how many participants.
1. Communication
Effective multi-participant budgeting ultimately comes down to communication. Some ways to support communication are by making sure everyone understands their part when it comes to the strategic plan and key objectives, opening up a two-way street between senior leadership and employees, and offering as much transparency as possible in the process.
2. Documentation
Multi-participant budgeting works best when budget managers are able to document their assumptions and defend the rationale behind their requests. Documenting one’s thoughts and ideas is a way to share insight efficiently without the need for direct conversation – a real timesaver in our busy lives.
3. Ease-of-use
When ease-of-use is a priority on your search for budgeting software, there are certain features to always keep in mind. Look for software with a guided step-by-step interface that makes data entry and analysis simple enough for budget managers but robust enough for finance team’s needs. Make sure the software has a flexible format, meaning users can choose whichever budgeting method (or methods) works best for them.
4. Increase engagement
With multi-participant budgeting, the higher the level of engagement, the smoother the process will go. Engaged budget holders are more in tune with organizational goals and are more willing to do the (sometimes really hard) work of creating an honest budget. And the more honest each participant’s budget is, the more reliable the final rollup will be.
5. Control and flexibility
We’ve all heard of top-down versus bottom-up budgeting. The truth is– organizations with multiple participants need a balance of both styles, including the right mix of financial controls for accuracy and flexibility. Tying in again to ease-of-use, users should be able to choose whichever methods work best for them.
To dive deeper into the benefits of team-based budgeting, check out our extended budgeting brief: When Budgeting is a Team Sport.
