Effective Budget Planning

𝗬𝗼𝘂𝗿 𝗽𝗿𝗼𝗷𝗲𝗰𝘁 𝗶𝘀 𝗻𝗼𝘁 𝗼𝘃𝗲𝗿 𝗯𝘂𝗱𝗴𝗲𝘁. 𝗬𝗼𝘂𝗿 𝗽𝗹𝗮𝗻𝗻𝗶𝗻𝗴 𝘄𝗮𝘀 𝘂𝗻𝗱𝗲𝗿 𝗿𝗲𝗮𝗹𝗶𝘁𝘆. Let’s stop pretending surprises are the problem. In my work as a PM coach and AI strategist, I see the same silent cost killers across industries and domains. If you're serious about preventing budget blowouts—start here 👇 𝟭. 𝗩𝗮𝗴𝘂𝗲 𝗥𝗲𝗾𝘂𝗶𝗿𝗲𝗺𝗲𝗻𝘁𝘀 ↳ If the goals aren’t clear, neither are the numbers. 👉 Clarity isn't optional. It's the foundation of budget integrity. 𝟮. 𝗢𝗽𝘁𝗶𝗺𝗶𝘀𝗺 𝗕𝗶𝗮𝘀 𝗶𝗻 𝗘𝘀𝘁𝗶𝗺𝗮𝘁𝗶𝗼𝗻 ↳ “Best-case scenario” isn’t a budget. It’s a trap. 👉 Historical data + pessimism + AI = your best shot at accuracy. 𝟯. 𝗜𝗴𝗻𝗼𝗿𝗶𝗻𝗴 𝗛𝗶𝗱𝗱𝗲𝗻 𝗖𝗼𝘀𝘁𝘀 ↳ Integration. Training. Stakeholder churn. Rework. 👉 Out of sight ≠ , out of scope. Name them. Cost them. 𝟰. 𝗡𝗼 𝗖𝗵𝗮𝗻𝗴𝗲 𝗕𝘂𝗱𝗴𝗲𝘁 ↳ The scope will change. Budget should too. 👉 Add a formal change reserve—or prepare for firefighting. 𝟱. 𝗪𝗲𝗮𝗸 𝗥𝗶𝘀𝗸 𝗖𝗼𝘀𝘁𝗶𝗻𝗴 ↳ Risks are registered. But are they costed? 👉 Great PMs budget for risk like CFOs budget for downturns. 🔁 𝗕𝗢𝗡𝗨𝗦: 𝗕𝘂𝗱𝗴𝗲𝘁 𝗪𝗶𝘁𝗵 𝗡𝗼 𝗢𝘄𝗻𝗲𝗿 ↳ “Finance owns the numbers.” “PM owns the plan.” 👉 Translation: No one owns the result. Fix that first. 💡 Budget overruns aren’t fate. They’re friction. And with modern tools—especially AI—we can now identify and mitigate cost drivers before they escalate. Curious how? That’s what I coach. 👇 𝗗𝗿𝗼𝗽 𝘆𝗼𝘂𝗿 𝗯𝗶𝗴𝗴𝗲𝘀𝘁 𝗯𝘂𝗱𝗴𝗲𝘁𝗶𝗻𝗴 𝗹𝗲𝘀𝘀𝗼𝗻 𝗶𝗻 𝘁𝗵𝗲 𝗰𝗼𝗺𝗺𝗲𝗻𝘁𝘀. 💬 𝗟𝗲𝘁’𝘀 𝗰𝗿𝗼𝘄𝗱𝘀𝗼𝘂𝗿𝗰𝗲 𝘄𝗶𝘀𝗱𝗼𝗺 𝘁𝗵𝗮𝘁 𝘀𝗮𝘃𝗲𝘀 𝗺𝗼𝗻𝗲𝘆. ♻️ Repost to help PMs control costs without killing team morale. 💾 Save this post for later—it’s your quick checklist for budget sanity. ➕ And follow Markus Kopko ✨ for more. #projectmanagement #budgetcontrol #pmcoach

Most non-profit budgets look good on paper. Until reality hits. A grant gets delayed. Expenses run higher than expected. A donor changes their priorities. Suddenly, that “balanced” budget isn’t so balanced anymore. This is where many non-profits go wrong - they treat budgeting as a one-time task instead of an ongoing strategy. A strong non-profit budget does more than just list numbers. It considers: The difference between cash and accrual accounting. A non-profit might "earn" a grant today, but if the cash won’t arrive for six months, expenses need to be managed accordingly. Many organizations make the mistake of assuming revenue is available just because it's on the books. The true cost of programs. If a non-profit receives $250,000 to launch a new initiative, is that enough to cover indirect costs like accounting, HR, and office space? Too often, budgets underestimate overhead, leading to financial shortfalls that put long-term sustainability at risk. Scenario planning. What happens if funding is cut by 20%? What if program costs rise unexpectedly? Successful organizations don’t just create a budget—they prepare for different realities, so they aren’t caught off guard. A budget should be a living document, not a static spreadsheet. When reviewed regularly and paired with strategic forecasting, it becomes one of the most powerful tools for ensuring financial sustainability. How often does your organization revisit its budget?

Budgeting season is when finance teams shine. It’s their Super Bowl. But once it’s over? Invisible. The forecasts become static while the business metrics evolve. But there are 3 powerful concepts Finance teams can use to keep 2025's budget agile and stay current and impactful throughout the year. 1. Turn your budget into an operational plan Your budget shouldn’t just sit in a spreadsheet - it should guide decision-making throughout the year. Set up processes that will keep it current, for example, meeting with key stakeholders regularly or reforecasting when performance metrics shift. 2. Have finance own business reviews The most successful CFOs drive performance by running regular performance reviews that incorporate both operational and financial metrics. Why? Because being close to business performance is the only way to become a true capital allocator for the company. This allows finance leaders to spot issues early, mobilize resources, and make decisions before problems escalate. 3. Move to rolling forecasts Rolling forecasts (continuously updated projections) are the backbone of agile planning. They help you stay current and adapt to shifting priorities. If your team lacks the resources to implement rolling forecasts, aim for monthly reforecasting to stay ahead. The right tech stack will make this fairly simple.

𝐈𝐬 𝐲𝐨𝐮𝐫 𝐛𝐮𝐝𝐠𝐞𝐭 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐞𝐝 𝐟𝐨𝐫 𝐠𝐫𝐨𝐰𝐭𝐡❓ I’ve evaluated hundreds of startups and found one thing in common among those who struggle to secure funding: their budgets don’t support growth. As a founder, your budget isn’t just a financial tool but the backbone of your growth strategy. Here are 8 questions to ensure it’s built for scalability and success: 1/ Is there room for strategic opportunities? ↳ Growth often demands agility. Ensure your budget includes a contingency fund for unexpected, high-impact opportunities. 2/ Are you investing in top talent? ↳ Scaling requires the right people in the right roles. A forward-thinking budget prioritizes hiring, retention, and upskilling. 3/ Does innovation have a seat at the table? ↳ Allocate funds for testing and experimentation to stay competitive in product development, technology, or market expansion. 4/ Are you leveraging smart financing? ↳ Growth often requires capital. Assess whether your debt is a strategic enabler or an obstacle to scalability. 5/ Is your cost structure scalable? ↳ Fixed costs can limit growth. Focus on flexible, variable costs that can adjust as your business scales. 6/ Do you have actionable financial insights? ↳ Decisions grounded in data are critical. Invest in tools that offer real-time insights to optimize spending and predict growth trends. 7/ Are you planning for the long term? ↳ Short-term budgets are reactive. A growth-oriented budget anticipates needs and risks over the next 3–5 years. 8/ Are you monitoring ROI relentlessly? ↳ Every expense should support growth. Set clear KPIs and measure returns on each dollar spent. 💼 Key insight for founders: - A growth-ready budget is dynamic and requires regular alignment with your vision and market conditions. What’s your top budget priority for driving growth in the coming year? ------------------------------ 📢 Stay ahead in fundraising, entrepreneurship, and VC strategies!  Follow Leon Eisen, PhD for actionable insights, tips, and expert guidance.

4 budgeting frameworks to try if you hate budgeting Most leaders hate budgeting.  And honestly, I don’t blame them. Traditional budgets are slow. They’re outdated the moment they’re done. And they often feel more like a political process than a planning tool. But here’s the truth  The problem isn’t budgeting itself. It’s the framework you’re using. Here are 4 approaches that actually work, depending on where your business is 1. Zero-based budgeting Start from zero every year. Force every expense to be justified, not just carried forward. Great for lean teams or companies that need to cut fat without killing growth. 2. Top-down + bottom-up blend Leadership sets targets. Teams build from the ground up. The budget becomes a negotiation between ambition and reality. Perfect for high-growth companies that want alignment across departments. 3. Rolling reforecast (R12) Forget the annual budget. Update every month or quarter on a rolling 12-month basis. This keeps the focus on agility, not predicting the unpredictable. Best for dynamic industries where conditions change fast. Strategic initiative-based budgeting Instead of line items, budget around priorities: new product, market expansion, sales motion. It forces alignment of dollars to strategy, not just costs to departments. Budgeting doesn’t have to be painful. But it does have to be intentional. The right framework gives you clarity, flexibility, and control. The wrong one gives you noise. Which framework does your team use and does it actually work?

When we work on projects, we are constantly watching the schedule and budget, but (if I had to pick) these are the 6 things we do that always save us the most on costs: 1 - Review and modify layouts to maximize efficiency. Stacking floor plans (or at least plumbing) is a must. We also look to minimize shared circulation and unfinished/unused spaces as much as possible. While it's tough to pinpoint the savings directly tied to these strategies when well-implemented, we've seen (many times) how wasteful it is when these aren't considered. (Intimate knowledge of the building code goes a long way here.) 2 - Schedule overlap where possible. Not everything needs to happen sequentially. We identify tasks that can run concurrently without compromising quality, significantly reducing overall project timelines. We do this for entitlements, design and construction 3 - Participate in scope meetings - all of them. When you're present for these discussions, you catch potential issues before they become expensive problems. This creates clarity for everyone involved. 4 - Create, maintain, and use vendor relationships. When you have reliable partners who understand your standards, it results in faster quotes, better pricing, and priority scheduling when you need it most. We also share news of upcoming projects with vendors, which helps everyone plan ahead and provide preferred availability. Some of our vendor relationships have saved us hundreds of thousands on single projects. 5 - Structure weekly team meetings. These check-ins create accountability and provide space to address small issues before they become major obstacles. A 1-hour meeting can save days of rework, especially when the meetings follow a structured agenda, where meeting minutes and action items are shared with the entire team. 6 - Track invoicing consistently & review the budget monthly. We do this in the industry-standard format of an anticipated cost report, which matches contract values vs what has been committed and paid to date across consultants and contractors. This disciplined approach to financial management identifies cost exposure early and prevents budget surprises. It's not just bookkeeping—it's proactive risk management. Implementing this framework consistently is how we straighten out projects that have gone a bit sideways, but it's also a great way to run a smooth process from the beginning. This approach doesn't have to be perfect. Implementing only some of these, even partially, is better than nothing. If you're new to development or struggling to find a firm footing on a current project, doing these consistently will help provide the team with clarity, and hopefully, that means ownership can provide clear direction.

The budgeting process as a #CFO superpower -- I know, everybody hates budgeting, but it's that time of year and -- the budgeting process is ultimately how strategy gets operationalized -- and it's owned by finance. Savvy CFOs use the budget to drive focus, alignment and execution - one CFO renamed budgeting to the "mobilization process". Here's what I've seen CFOs do to make the budget a superpower, they use it to: 🔘 Force clarity on the realignment of the business model that needs to happen to enable. your strategy/investment thesis. 🔘 Drive clarity on the strategic assumptions that underpin the strategy -- which ones are hard (you can fund) and which ones are squishy (you have to test) 🔘 Drive clarity on the critical capabilities need to execute the strategy (know which capabilities are differentiated advantage capabilities vs. threshold -good enough- capabilities) 🔘 Create choice-making that takes dollars aways from parts of the business are efficiency plays (vs. growth plays and transformation plays) - zero basing can help here. 🔘 Bring workforce planning forward so that budgets can be set with a realistic view of the workforce and spend -- and realign your workforce to take head count out of the efficiency plays and realign to growth and transformation plays). I'm always amazed that most companies do workforce planning after budgeting when the workforce is the majority of your budget. 🔘 Drive cross-functional alignment and resource tradeoffs, coordinate dependencies and create opportunities for collaboration. 🔘 Enable organizational agility by establishing slush funds for unforeseen opportunities or risks and setting up dynamic triggers to reallocate resources quickly across functions or business units. 🔘 Create focus and set the stage for high execution. Budget is where the rubber meets the road when it comes to strategy and CFOs need to use the process to pressure test, align and energize the organization whether it's a formal process or an ongoing process. Budget is what knits strategy to operations and execution. If nothing else, using some of these ideas will make budgeting more interesting than last year +5%.

Budgeting ≠ Cutting down expenses Instead, it is about making smarter financial decisions that fuel growth, whether for your finances or business. But did you know there are different ways to build a budget? Here are four methods and when to use them:  → Incremental Budgeting –  This is the simplest and most common budgeting method. It works by taking last year’s budget and adjusting it slightly based on expected changes (inflation, growth, cost increases).  → Activity-Based Budgeting (ABB) - Instead of just tweaking last year’s numbers, ABB starts from scratch and links every cost to a specific business activity. It helps businesses optimize spending by understanding what truly drives costs.  → Value Proposition Budgeting – This method ensures every budget item contributes to the company’s value proposition. If an expense doesn’t add value to customers, employees, or stakeholders, it’s questioned or cut.  → Zero-Based Budgeting (ZBB) - ZBB requires every expense to be justified from scratch, rather than assuming past expenses should continue. It’s a powerful way to eliminate inefficiencies and ensure spending aligns with strategic goals.  Each approach has its pros and cons and the best method depends on your goals and business model. Some companies even use a mix of these methods for different departments.  Have you tried any of these methods? #personalfinance

The Five Phases of The Annual Budgeting Process Having led 11 annual budgeting processes at P&G, Unilever, and Squarespace... I realized that each time we go through five distinct phases. Whether the planning process is a success or a failure depends on how well you manage each of them: 📌 Phase 1: Pre Kick-Off - "Planning the Plan" What you should do upfront: • Review the previous year's plan • Create the planning roadmap • Implement process improvements 📌 Phase 2: Joint Planning - "Any Questions?" Partnering with the cross-functional team: • Business teams create the bottom-up plan • FP&A creates the top-down plan • Together, FP&A and business teams compare plans, discuss variances, and - crucially - assess risks and opportunities 📌 Phase 3: Consolidation - "What's the bottom-line?" The finance team collects inputs and creates consolidated financial statements: • Consolidation must be fast to avoid playing catch-up with new assumptions • Consider using a planning system instead of just Excel to drastically simplify the process 📌 Phase 4: Iteration - "If once you don't succeed..." Most of the time, the first round of inputs doesn't meet expectations: • Use ranges, scenarios, and contingency plans to make adjustments quickly • Stick to your deadlines • Most importantly: Overcommunicate! 📌 Phase 5: Presentation & Final Alignment - "We are all one team." Finance builds the deck and gets leaders on board with the plan: • Don't just present the financials, include how strategies translate to tactics and how those will be measured • Quantify how each strategy is likely to impact the financials • Don't forget an executive summary that highlights the key issues that must be discussed -> Download the detailed infographic for best practices during each phase A common problem: Annual budgeting gets hectic and stressful when people wait until the very last minute to submit their inputs. 📌 That's why I created a FREE mini-course with best practices for setting budget timelines. You'll learn: • The critical things you must do BEFORE starting the budgeting process if you want to make it effective  • How to use the RACI ownership structure framework to assign clear roles and responsibilities to everyone involved  • Setting budget timelines that guarantee you get your inputs on time using the Staggered Timeline method Get the "Mastering Budget Timelines" online course for free here: https://lnkd.in/dBe_izJ9

The budgeting process is currently underway, and it's essential to ensure that every step is carefully executed for optimal results. Here are 7 key steps to streamline and enhance your budgeting operations: 1. Define Timelines, Roles, and Deliverables: Start by setting clear goals, assigning responsibilities, and establishing a timeline with critical milestones to ensure the process stays on track. 2. Review Historical Performance: Dive into past financial data to identify trends and patterns that will inform and improve this year’s budgeting decisions. 3. Forecast Future Trends: Project future revenues and expenses while taking into account external factors such as market conditions, competition, and technology shifts. 4. Set Financial Targets: Translate strategic goals into measurable financial targets for each department, aligning objectives across the business. 5. Develop Departmental Action Plans: Ensure each department develops a comprehensive action plan detailing how they will meet their financial targets. 6. Create Department Budget Projections: Estimate the costs and revenues for each department, which will contribute to drafting the overall budget. 7. Consolidate and Finalise the Budget: Bring together all departmental budgets, review them thoroughly, and refine them for approval by senior management. By following these steps, your budgeting process will remain structured, efficient, and aligned with your strategic goals.