Did you get a chance to read Tom’s blog titled "Precision vs. Accuracy"? He makes some great points about how Planning is Preparation, and compares poor preparation to an annoying traffic situation he encountered. The driver behind him was honking at him to hurry up because he hadn’t planned adequately for the time required to drive to his destination.
Confession time. I think I was that annoying driver behind him. Maybe because of poor preparation on my part, or maybe because of circumstances out of my control. I didn’t intend to be running late, but for whatever reason, I now had to rush to get to my destination.
Does that situation remind you of your annual Budget process? You had every intention to start early, meet with colleagues and get their feedback, and create meaningful reports and graphs that add value. But the reality is that on a daily basis multiple priorities compete for your immediate attention and relegate budgeting to the bottom of your never-ending list. Before you know it, it’s time to create your annual budget and you find yourself up against a critical deadline and operating in crisis mode, looking for a quick turnaround from people who have their own priorities. You’ve become the person honking at Tom to hurry up.
If this situation sounds familiar to you, TRUST ME when I say that MONTHLY REFORECASTING MAKES ANNUAL BUDGETING QUICK AND EASY. Spend a few minutes every month reviewing your actual data and making little tweaks to the forecast in future months, based on the trends you’re experiencing. Use your current management conversations – as they’re occurring – to update your forecast. Draw some conclusions about the direction you’re headed, and inform others in time for your organization to make positive adjustments to your current actions. Use our automated tools to keep a running forecast up to date with no additional effort. If you do that, when it is time to review your Budget for the upcoming year, YOUR ROUGH DRAFT WILL ALREADY BE DONE. Adjustments to this starting point will be quick – and not another fire drill - allowing you to spend more time on meaningful conversations reviewing strategic growth plans, not on chasing people down for input.
So hit the snooze button one more time tomorrow morning. Call us when you get into the office, and ask for some pointers on how to start creating a meaningful forecast. Go ahead and annoy the Toms of the world on the drive to work – but just for fun. When you spend time updating your forecast regularly, you’ll be checking "Complete Annual Budget" off your list before your deadline!