Getting to Better Budgeting: 5 ways to up your budgeting game

Published by the Canadian Golf Superintendents Association in GreenMaster (Fall, 2017).

The very thought of budgeting can conjure up feelings of an abundance of effort for little in the way of outcomes.  Ask people how successful they are when it comes to meeting (or beating) their budget and many will say “not even close”.  Suggest that a budget should be prepared before getting started with a new fiscal year or venture and the response might be “we can’t predict the future, so why bother?”.  And when all else fails, there’s always the familiar excuse of “nobody looks at those things anyway”.  These viewpoints are more common than one would expect, but actually, they are far from accurate.  Why is this the case?

The simple reason is that budgeting is a learned skill, and practice makes it better.  When considered in this context, here is what the comments above actually mean:

What They Said Translation
“Not even close”

The budget wasn’t reasonable.

We didn’t pay enough attention to the budget once it was developed.

“We can’t predict the future, so why bother?” We don’t know enough about our organization to prepare a meaningful budget.
“Nobody looks at those things anyway” We don’t understand budgets.

Experienced advisors know these misconceptions all too well, and the only way to overcome the challenges of budgeting and improve outcomes is to take action.  This means implementing a sound budgeting process, upon which an organization can build over time.  Here’s how:

  • Assign the right resources: Those who are responsible for conducting the actual budget work should have relevant experience, including a professional accounting designation.  Since budgeting is a specialized area, in the event that an organization’s staff members have not previously conducted budget work, the necessary training and education should be provided in advance.  Advisors can also be helpful in this regard.
  • Have a game plan: Developing a budget doesn’t just happen, and it’s important to have an action plan that identifies all critical activities, timing, and responsibilities.  The budget should have a standard format, including an Income Statement, Balance Sheet, Cashflow Statement, as well as supporting schedules and assumptions that provide the rationale for how amounts were developed.
  • Engage the senior team in the process: A budget shouldn’t be developed in isolation, such as by an organization’s leader or the “Accounting Department”.  This approach can result in those on the senior team taking the view that the budget “doesn’t belong to us”.  In order to avoid this scenario, all members of the senior team should be involved, by way of developing the budget assumptions that pertain to their area, as well as review of drafts and finalization.  This approach gets everyone on-side, making the budget that of the organization and its team.
  • Draft, review, and revise: Budgets don’t typically come together on the first try, so it’s important to prepare a draft version, review and critique it as a team, and revise where required.  This process might take a few drafts, but it is rich in learning for everyone involved.
  • Implement and monitor over time: A budget only means something if it is formally implemented and monitored over the full period to which it pertains.  Common mistakes include developing a budget and either not formally implementing it (so people think it doesn’t matter) or failing to compare actual performance to budget on an ongoing basis.  Either scenario leads to poor outcomes.

The good news is that the work is in getting started and these efforts can be leveraged over time, through re-use and enhancement of what has already been put into place.  Starting now creates the opportunity to get on the path to making the process easier sooner.  What’s more, the good performance that can be generated will add some distance to your game.

The Executive Edge (Generating Results)

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Published by CPA Canada in CareerVision

Although it’s true that executive level roles have a greater strategic focus and are further away from the front line action, senior level people still have to be able to get things done.  Whether it’s helping a management team to solve problems, identifying an expansion path, or overseeing core business activities, executives are accountable for (and often judged by) results.  This is not an easy place to be, particularly in times of change or declining performance.

So, if people at the senior level of an organization are less involved in front line work, how do they get things done?  The answer might be as simple as comparing a successful executive to one who is less accomplished in this regard; think: sound planning and direction; ensuring that a company has the right systems in place that allow staff and management team members to do more; generating a motivating environment; and, of course, having all of the right skills on hand.  This could be described as a “gentle push”, that allows a company to move forward with decisive support, as opposed to stagnating or being plagued by indecision.  Smart executives know that getting things done is, in part, about decision making, but also about having the necessary experience and judgement to make good decisions.  It is this ability that fuels the critical act of implementation and the results that follow.

In this series, we have already considered the importance of a number of Executive Edge skills, including collaboration, professional development, and generating respect.  Here’s more about why successful executives understand the importance of implementation and getting things done.

Where it Goes Wrong

Executives who lose focus on the importance of generating tangible results might find themselves on the outside of relevance.   Whether leading a for-profit business or managing the limited resources of a not-for-profit organization, results and productivity matter.  Those who spend too much time on unfocused or theoretical efforts run the risk of leading an organization to a point where it will ultimately do less; this is the risk of becoming too far removed from the front line work.

Before too long, organizations can start to have a lack of urgency; a dangerous place to be in a competitive, and resource constrained world.  What doesn’t get done today gets put off until tomorrow, as the weeks and months go by with little achievement in the way of tangible results.  From a customer standpoint, who wants to deal with these companies?

Get the Executive Edge

Ensure that upward mobility on the career path includes sufficient focus on turning the wheels of productivity.  Here’s how to keep focused on generating results:

  • Use meeting time wisely. Meetings should be used to communicate important information, seek input, confirm action items, and move forward.  In order to ensure that the focus is kept on getting things done (and not just talking about it!), meet only when needed, maintain focus by using agendas and action items, and curtail non-productive chit chat.
  • Pay attention to standards and systems. Although some might consider processes and standardized approaches to be mundane, remember that they not only benefit the company, but also those who perform well enough to meet or exceed targets. Use standards and systems as an opportunity to accelerate performance.
  • Measure and monitor results.  Once standards are in place, they have to be managed, which means measuring actual results to target and taking corrective action where required.  Those who have the discipline and talent to do so are well regarded by the senior ranks.
  • Compensate based on results. Structures that include a meaningful variable component tied to performance tend to focus people’s efforts on what’s important.  Good compensation structures include short term and long term incentives, as well as measures for individual, departmental, and organizational performance.  Roles that are structured in this manner can be a good opportunity for those on the way up to demonstrate their worth in tangible terms.
  • Watch competitors and the marketplace. Paying attention to what’s going on in the outside world can be an important reminder that organizations need to take action in order to remain relevant to those that they serve. Remembering that any organization should be thinking about customers, competitors, and markets at least 50% of the time can help to instill a results oriented mindset.

The reality is that the more senior a position becomes, the more directly accountable it is for the performance of the entire organization, which, in turn, reflects how well the actual job is conducted.  This is a significant shift from that of less senior roles, so the sooner that the “results” skillset is developed, the better.

The Executive Edge (Reliability)

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Published by CPA Canada in CareerVision

Many of us grew up with parents who always challenged us to be our best.  “Take pride in everything you do”  “Do the very best you can before turning in your assignment” “Check your work!” Given the many times these lessons were repeated during our childhoods, it’s a reasonable assumption that the outcome just might be an attitude of high achievement that comes from within and lasts a lifetime.  If this is the case, why is it that the impact of so many of these lessons seem to be absent from the workplace?

Most careers begin by starting out in an entry level position and progressing forward, as skills and competencies develop and opportunities for advancement emerge.  One of the important factors that employers consider in this regard is the degree of self managed initiative and “ownership” that a staff member exhibits in performing their job.  In other words, are staff members challenging themselves to generate the best possible work, or are they simply putting in a marginal effort and passing their output to the next level without any real accountability for the results?

Experienced executives know that there are a number of skills that are crucial for achieving success in their role; consistently demonstrating high quality results is certainly on the list.  Taking the initiative to understand and adopt these important skills can give you the Executive Edge; one that differentiates you from others in your peer group and generates better results today, while helping to prepare you for advancement tomorrow.  In this series, we have already considered the importance of comprehensive reading and clear communication.  Here’s more about why taking ownership of your role to generate great results is so important.

Where it Goes Wrong

Here’s some information that might be a bit of a news flash to those who fail to advance in the workplace: it is not your supervisor’s role to find the mistakes in your work- it is your responsibility to do so.

Yes, it’s true that supervisors and managers do find errors in the work of others, but quite frankly, this often occurs in the course of performing their actual role (i.e., being responsible for a particular area of a business), and also, unfortunately, because too many staff members don’t take enough care in completing their work.  As a result of this situation, staff members who live by the rules of always putting their best effort forward are easily differentiated from their peers and often have the best opportunity to advance to more senior roles.

Get the Executive Edge

Put yourself on the executive path by remembering the good advice that many of us received years ago- take pride in your work!  Gain the reputation of bringing quality and reliability to everything you do; here’s how to get started:

  • Understand the requirements first. When approaching any task, take the time to fully understand what is required. Read instructions fully and make the effort to ask for clarification where required (flashback to our first article in this series: it’s amazing how many people don’t take the time to read thoroughly!).  Time to prepare well is time well spent.
  • Take notes. Experienced executives recognize that the corporate world is complex and the number of tasks at hand can be extensive.  Thinking that you will remember it all doesn’t make you look smart; it makes you look inexperienced!  Taking notes on how to complete tasks and workplace assignments is an important support to generating a quality result.  It also allows you to build your own reference manual.
  • Check your work.   Once you have completed a task, step back and review it from a fresh perspective.  Make yourself accountable for finding any mistakes or areas of improvement before passing your work to the next person.
  • Learn how supervisors and managers approach their review role. Take the opportunity to speak with your supervisor to learn more about what they look for when reviewing the work of others. Ask them what success “looks like” for the particular task in order to visualize and better understand what you need to do to generate a successful outcome.
  • Document and learn from your mistakes. Treat every experience where feedback is received as an opportunity to learn and improve.  Remember that supervisors expect staff members to learn from these experiences and not make the same mistakes in the future.  Challenge yourself to never make the same mistake twice.

It’s often been said that work that is done quickly, but not correctly, is of no value.  This is true.  Add up your time to complete the task initially; your supervisor’s time to review your (substandard) work; and the time to revise and review the work again and this lesson becomes crystal clear.  The real risk, however, is situations where poorly completed work somehow makes it through the review process into a larger realm, potentially damaging the company and, perhaps, others.  This risk alone is reason enough to check your work!