Large companies sometimes have departments dedicated to budget. But most of the time, we deal with financial departments regarding missions related to budget.
Approach and content
Missions related to the budget monstly concern the budgetary process.
Our approach is based on a complete process reegineering since it involves revisiting the various stages of the budgetary process, identifying the deadlines for each party in the budget construction process, clarifying the rules that must govern the budget proposals, specifying the conditions for validation (committee, composition, etc.) and the feedback process to the various teams.
Usually, the budget on process review is often cumbersome due to a reality that is often well established and relatively inefficient. Once, we encountered a budget process that lasted 11 months ...
Finally, the validation of the recommendations of a new budget process is relatively complex. Our experience leads us to note the large number of actors involved in such validation. There is frequent back and forth on the operational work on the budget process.
The "reforecast" / "rolling forecast" process is similar and calls for the same remarks.
The need to refer to the original budget
The "reforecast" is the exercise of updating the budget. The process associated with reforecasts is specific to a company (although the large groups have based their modus opereandi on large american groups).
Somehow, this 'reforecast' cancels and replaces the initial budget. Still, the original budget, a sort of budget 0 for the year, must be maintained to enable a better analysis of the discrepancies. It allows us to remember that reality is compared to the budget and not the opposite.
The budget exercise: a cat and mouse game
A handicap that is difficult to avoid is the habit of "hiding the budget" or "consuming the budget balance to protect next year's budget".
These natural reactions within the teams can only be countered by the approach of a "base 0 budget", or BBZ, which - in part - avoids the game of hide-and-seek on budget items.
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