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Budget 360 – It’s time to take a big picture approach to the process

June 28, 2022

by Bob Mims, CPA

I remember my very first budget meeting of the year. For 18 years, we went through the same type of budget exercise in which the company would ask each department to submit detailed reports, and Accounting would roll the budget up to see "where we were." 

All the department heads were there: Operations, Warehouse, HR, Sales, Advertising, Marketing, and Membership. The names and faces would change over the course of those 18 budgets, but the process stayed generally the same. We would set the plan, hope for the best and then begin a tedious exercise to negotiate the budget to where it needed to be. On this occasion, I walked into the meeting with my colleagues and said…

  • We have a problem.
  • Each of our departments did a great job in this first round of the budget, too great of a job, and we are about $5 million over where we need to be.
  • I need each of you to go back to your teams and figure out how we might spend more money in your budgets for next year.

Later that morning when I awakened from my dream, I realized that utopian fantasy never actually happened, and probably has not in the history of budgets.

One can dream of the day that our budgets and budgeting process can work seamlessly and integrate with all of our departments so that there is a smile on everyone’s face.

Most organizations have flaws in the process that can make the budget untenable. There are multiple solutions to this process that can help lead your budget to a better place, and one that is more enjoyable for all.


I led a strategic planning effort for a large institution and was met with resistance in our first meeting. Although I am a CPA, I explained to them I certainly did not understand their organization, priorities, or possibly even have the mental capacity of the leaders in the room. Those compliments did not work, so I started the meeting with a question, "What is a strategic plan?" A rhetorical question. I remember saying, "If I went around this room of 10 people, I’m likely to get 15 answers to this question, because 5 of you will even disagree with yourselves as to what a strategic plan is."

The group began to listen and ultimately agreed that defining a strategic plan and agreeing to that definition was perhaps the most critical part of the process. Same with "budgeting." Each of you as a leader of a budgeting process are the subject matter expert. Many of your colleagues don’t like numbers and few of your colleagues took Intermediate Accounting.

Defining what the budget "is" every year in the process and develop agreement for your organization’s meaning and purpose - is core to successful budgeting.

A budget can be both compass and guide that measures financial performance of a company.

This broad definition may suit most people in an organization. Educating your constituents on the variables of the budget may prove more challenging.


Many of you likely review last year’s budget as part of your annual performance for your company. Most companies, however, do not gather their constituents to review the budget process from last year to seek ways to improve upon it. If it takes an organization four rollups to attain an acceptable budget, can you do that in three rollups this year? Are there other challenges that were faced last year and in the process that can be improved upon? Seeking input from your colleagues with an open ear for solutions may help you to find a better path for the current year’s budgeting process.


Educating others about the budget and its process may be the single most important element towards long term success with your team. Most budgets have the following three elements:

  1. Revenue and Expense
  2. Capital Budget
  3. Cash Flows

It is important to bear in mind that while these components may be understood by CPAs, other budgeting stakeholders typically do not have a firm grasp on these elements. Walking through these elements with your budget team is a valuable exercise.


Think of your mind (for accounting purposes) as a Formula 1 vehicle for accounting. While our understanding of accounting/budgeting is at the expert level, it does not help you in the budget process if your leadership does not have the proper influence. Influence is the "gas" that helps that Formula 1 vehicle go from point A to point B. Your ability to communicate effectively on budgeting depends more on your relationships with constituency than it does your subject matter expertise.

Budget leaders would be more effective if they spent more time listening to others and their needs to develop a core understanding of their own personality traits and those of others. Without this understanding, communication is an uphill battle.


Mapping bonuses to the entire organization is a certain way for all employees to keep their eyes on meeting the objectives of the budget. My experience suggests that these incentives should be both accrued in the annual budget and based upon bottom line targets for payouts.


Do you remember a budget when everything that was planned actually happened the next year? Me neither. In a prior company, I remember placing a $150k contingency as a general cover on things that we had not anticipated. I also recall the CEO of our organization being intimately involved in our budget process that year and I appreciated their leadership in understanding the numbers we were working through. When the budget was passed by the board of directors, the CEO made their report to the board. The CEO added that one goal was to hire a chief marketing officer next year and start a marketing department. Although the contingency did and would not cover the balance of the CEO’s idea, at least it offset some of the cost.

In our CPE program, 360 Degree Budgeting, we cover contingencies at length on the “how and why” to insert them into a budget process where they do not currently exist. Much of the focus is devoted to best practices for budgeting, budget process efficiencies, the “people element” of budgeting, and how best to effectively report your budgets to stakeholders.

We can make budgeting so much more than the mundane task of monotony and difficult negotiations and choices. Much depends on our willingness to personally grow and be a continuous learner coupled with a willingness to continually evolve your company’s process for the better.

Your budget process can improve!

Bob Mims, CPA, is currently serving as a CFO and Chief People Officer for a startup venture. A three-time national instructor of the year for KPMG, Bob has also authored multiple courses for Fortune 500 brands in leadership, strategy, and accounting. He served terms on two advisory councils for FASB and currently chairs the Environmental Roundtable. Bob lives in Memphis, TN with his wife and large family with multiple pets.