5 Ways to Finally Achieve a Collaborative Budgeting Process

What’s the best way to describe your current annual planning process?

Messy? Endless? Frustrating? Stressful?

How about collaborative?

Leading businesses have cracked the code, completing their budgets in 28 days or less. And coordinated, collaborative planning is one of their secrets.

Imagine if the solitary uphill battle to produce your annual plan became a team effort where the budget was informed by insights on business performance and operations from every budget owner.

If you’re tired of a disconnected and drawn-out process where leaders start to throw out whatever numbers look and sound good without a plan to succeed…it’s time for a new approach.

Try these five tips to achieve a faster collaborative expense planning process.

‍Looking for the basics? Start here: What is collaborative budgeting?

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Tip #1: Implement regular check-ins

Start every planning season with a calendar. Strategic budget planning has a lot of moving parts, so you need attention to detail and some guardrails to keep everyone on track.

A planning calendar helps you work backwards from the date of your board meeting and set checkpoint meetings: 2 or 3 major stops to review your progress, and smaller meetings with budget owners to work through the numbers.

Regular check-ins will lead to fewer surprises along the way and alignment between FP&A and other teams.

Tip #2: Review past performance

Previous budgets will be a key resource for your next annual plan. Look through the lens of past performance for more productive conversations. Ask, “how did these elements contribute to our overall financial and business goals?” Then you & your stakeholders can craft a budget that aligns with next year’s goals, choosing to cut some elements, maintain others, and invest more elsewhere.

Ultimately, this makes stakeholder discussions more nuanced and productive. For example, if you know that your marketing team is happy with the number of sales leads coming from webinars, you can discuss the tradeoffs of possible cuts and find areas they could trim that would have the least impact on short-term demand. It is a more strategic approach than blindly requesting that they cut that program entirely.

Performance insights help you to be an involved business partner instead of a disconnected dictator suggesting arbitrary cuts.

Tip #3: Foster open communication

Ownership is an essential component of collaborative budgeting. If business leaders see finance as a bottleneck (or worse, as an opponent), they’ll be less likely to respect and support the annual targets and their budget.

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“When budgeting is a collaborative endeavor rather than an interdepartmental war, stakeholders will design more realistic targets and be more willing to compromise.” Perry D. Wiggins, APQC, for CFO.com

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• Be a listener. Leave each conversation with your business partners with new insight or a better understanding of their current challenge or primary goals.
• Empower and educate non-finance stakeholders to understand how their department contributes to the overall plan and targets.
• Use the features of your FP&A software for greater transparency and to step aside from finance as the gatekeeper. Help each budget owner access their part of the plan and provide input directly.

Tip #4: Focus on efficient FP&A planning tools

FP&A software for budgeting and planning will streamline the entire process and facilitate collaboration. It provides the single source of truth and eliminates version control issues, which is a major liability and a primary hesitation that finance leaders have with involving more people in the planning process.

Organizations who plan in Excel or Google Sheets understand the frustration of tracking down formula errors or changes made by a budget owner who meant well, but deleted key info or added incorrect data into the spreadsheet.  

“Midmarket FP&A teams often have 30+ different budget owners to engage with. Emailing different spreadsheets around to capture their input is painful.” Stratify Blog | The Collaborative Budgeting Process Your Finance Team Needs

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It’s important to find the right tool to support strategic budget planning. Stratify enables collaborative expense planning by directly engaging budget owners to respond to comments or questions, input into their own budget, all in a user-friendly interface.

Another side benefit? Switching or upgrading to collaborative budgeting software will give your analysts more time to connect with business partners. When they spend less time on manual and tedious FP&A tasks, they’ll have the bandwidth for important collaborative conversations.

Explore more: How to Use Workflows for Collaborative Budgeting in Stratify

Tip #5: Confidently compromise and problem-solve

Get comfortable with the give-and-take that needs to happen in order to approve the budget. Re-frame how you think about the planning process. It’s an opportunity to transform FP&A into a proactive driver of business strategy.

You have a superpower you can leverage; FP&A has the big picture of the entire plan. Budget owners know their own budget and goals, but can’t see others’ plans the way you can. Use your visibility to apply operational insights and orchestrate solutions across departments to solve their biggest challenges.

Moving forward with collaborative expense planning

We can’t guarantee a completely painless budget process, but with these five best practices, you’ll see a difference in alignment between business units and between the annual plan and company goals.

The best plans are informed by stakeholders themselves, and Stratify is the supportive FP&A solution built to empower your collaborative planning process.

Transform budgeting into a proactive, inclusive process that drives your business forward. Take a look inside Stratify planning workflows for collaborative budgeting in a personalized demo.