5–16. Issue a Budget Procedure and Timetable
The typical budget dies a lingering death. It is not issued on time, nor is the first issuance likely to be the last one. Instead, there are a multitude of last-minute changes that force the budget process to continue into the next year. As a result, the budget may not be usable as a basis of comparison for new year results for several months.
The best solution is to issue a tightly structured budget procedure to the organization, along with an accompanying timetable, that specifies when all activities will occur, who will complete them, and when a deliverable is due back at the budget manager’s office. By laying out the process in this manner and following up closely on all due dates, it is possible to issue a complete budget on time, every time. A good budget procedure should include the following steps, at a minimum:
Benchmarking comparison. Though rarely used in a budget, it is extremely useful to conduct a benchmarking comparison of corporate performance against those of “best in class” companies, and to provide this information with the budget packages that go out to all departments, so that they can set expectations for improvements in their areas. This task can be completed well in advance of the regular budget process.
Revenue budget. The first part of the budget process is always a determination by the sales staff of what they ...