Confusion - XLerant

That’s Not My Number

Probably the worst moments I had as a Manager of Financial Planning and Analysis when I was at Pepsi Cola International and Reader’s Digest; was when someone would say, “That’s not my number!” The embarrassment factor was a function of A) The level executives in the room… B) How late in the planning process we were… C) Just how big the discrepancy was.

If it was just a group of managers in the room, and it was early in the process, and the discrepancy wasn’t that much… well that was easy to deal with. But if we were in a senior executive review to finalize the budget, and someone said, “That’s not my number!” and all eyes turned to me…

We’ve all been there. You can be right, and still be wrong.

You’re right in the respect that you have the most final and up to date version of the budget in your hand. But wrong in the sense that the line manager didn’t get it, or understand it, or buy into it. In other words, if you don’t have a real meeting of the minds — or more simply put you’re not on the same page — then it becomes your problem.

The burden is on Finance to make sure the numbers “are right” and everyone is in synch. It may or may not be fair, but that’s the reality.

Now when we’re talking about the burden of making sure the numbers are right, here are four fundamental requirements:

1) Any and all underlying calculations are accurate (no miskeyed formulas)

2) All the numbers roll up correctly (no broken links between templates)

3) The line managers understand fully all the assumptions in their budgets

4) When it comes time to present to the executives, Finance and line managers are working with the same version.

Out of these four bedrock requirements, I’d say it’s #3 that is most often to blame for soliciting “That’s not my number!”

Think about it. Points 1 and 2 are problematic and difficult to get right, but it’s basically a mechanical issue. And point 4 can be problematic too, but the solution is procedural. So points 1, 2, and 4 require a lot of work to get right, but the solutions are straight forward and “knowable.”

But point 3 – making sure the line managers fully understand all the assumptions in their budgets – well that one is much more elusive. And ultimately, the only way to really ensure that managers really understand their budgets is to have the managers develop them. It’s a little like the difference between having a CPA prepare your personal tax return, or doing it yourself with Turbo-Tax. You get the same answers, but when you use Turbo-Tax you know why.

Getting line managers to really understand their budgets is a greater undertaking than can be addressed in a single blog post. But this is a good start and we’d welcome your comments.


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