Let’s face it, budgeting is not fun, especially when you’re the one tasked with reviewing the spreadsheets. Here are some important budgeting process steps to consider during the review process!

1. Take the time you think you need and double it!

Reviewing takes more than five minutes. Ideally, most of your reviewing time should be spent on ensuring the numbers make sense and not checking if the merge worked successfully or if the numbers actually add up correctly. You want to be looking for business issues and not process issues in the review and these all take time.

• Did someone predict a huge increase in sales but forgot to also increase costs of goods sold?
• Does the person really think they don’t need additional marketing funds this year?
• Did this user justify a 25% increase in salary costs?

Make sure you give yourself enough time to do this properly and follow-up with the contributors. As for verifying if the merging worked, unfortunately there’s not much you can do about that if you’re using Excel on its own.

2. Don’t Sweat the Small Stuff

Look at the table below and while doing so, the “one of these things is not like the other, one of these things doesn’t belong” song should be running through your head. In this scenario, postage accounts for 0.10% of the total budget. Even if the amount was twenty-five times as large, it is irrelevant in the big picture. The message here is when it comes to reviewing, be sure to focus on the big ticket items that make a difference.

3. Decide Who Owns the Numbers

When you start the budgeting cycle you need to decide who “owns” the numbers. The front-line contributors to the budgeting plan and those who are accountable to those numbers should be the only ones who can change them. However, if you do allow reviewers to change the numbers, then it is absolutely critical that those who are being held accountable to the budget know:

• What changes were made
• Who made the changes
• Why the changes were made

4. Make Sure You Understand the Context

Let’s say that you sell an item with a sales price of $5,000 and last year you sold 1,000 units which equates to $5,000,000 in revenue. But this year your sales manager is forecasting sales of $7,500,000 – a jump of $2.5 million!

• How does he back up that increase and what does that truly mean to your organization?
• Can your current manufacturing facility handle the extra volume or do you have to buy additional machinery and put in more production lines?
• Do you have to find additional sources for raw materials?
• Do you have to hire more people?

Each of these questions carry financial ripples to your organization. Even if you get perfect budget figures, but you don’t understand the context of the numbers, then you are still behind the eight ball.

5. Surprises in Review Means You Have Failed

At the end of the day, the final budget figures should be of no surprise to anyone!

Looking for more financial budgeting tips and tricks? Download our free eBook, Budgeting Best Practices.