Our last piece explored why companies would rather send random children to Disney World than prepare an annual budget. Today, we are going to discuss three reasons you should embrace budgeting with a smile.
1. Budgeting: Know Thyself!
The budget is not just a collection of numbers, but an expression of our values and aspirations.
A budget process helps an organization identify and orient itself around its core values, a financial true north if you will. At the onset of the journey you ask, what are we trying to accomplish this period? At decision points along the path, you ask if each decision will help move the organization toward its goals. As you go forward and acclimate to the journey, an organization can use the budget to assess the appropriateness of its goals and reassess.
2. Resource Allocation: Project the Future
The best way to predict the future is to create it.
Step one offered direction. Step two is to identify the resources needed to follow that direction. Do not leave the future of your organization to chance. Point your resources towards your goal. Build a plan on how additional resources will be obtained. Own the future!
3. The Horizon: Playing the Long Game
Someone’s sitting in the shade today because someone planted a tree a long time ago.
The most successful organizations I work with are typically the most enduring. They play the long game. The operating system of these organizations is designed to pursue bold long-term goals. They establish quarterly goals that feed into annual goals which feed into decade-long goals. They line up priorities like dominoes. A key component of this mentality is a budget. Most of these organizations have some form of multi-year budget. Some organizations have highly detailed budgets while some prepare what I would call a “gist’ of a budget. Regardless, there is thought put into a plan. A plan is documented. That document becomes a tool that can be used, sharpened, and improved upon over time.
Do any of these reasons for building a budget resonate with your organization? Have you tried budgeting only to become frustrated by the process? Do you need a coach to help you walk through the process? Do you need a gentle nudge to take that first step? Whatever the case may be, our team at Dean Dorton can help.
Justin currently leads Dean Dorton’s Accounting and Financial Outsourcing (AFO) group, providing outsourced accounting and business consulting services to clients throughout the country in a variety of industries.