Drawing up the budget: best practices

Do you want to introduce a budgeting tool but your project is a minefield? Do you wonder which solution to choose and are you up against internal resistance? Raphaëlle Thomas, FPM1 Manager at Micropole, the leading group in Europe for budgeting solutions, lists the best practices.

1. Define your upstream processes
The more precise your functional requirements and management rules, the more effective you are!

2. Determine the controlling area
Establish a scope of action, product categories or ranges. Never carry out your project at overall company level, which is too large to make your monthly forecasts.

3. Opt for an iterative model
Test your budget project with one department. Thus, you’ll be able to develop your management rules and promote skills transfer.

4. Choose your tool wisely
Take time to measure the installation and administration costs involved. Depending on the level of complexity of the solution you select, extensive expertise may prove necessary.

5. Involve the functional project management…
… throughout the implementation stage! The management control Department must oversee the project, define the rules and take the decisions.

6. Abide by the 80-20 rules
20% of factors contribute to the achievement of 80% of set objectives. Therefore, you must integrate this principle into your budget.

7. Include governance
Involving the Finance and Administration Department as well as the general management from the onset of the project is critical. You must consult them in order to be in line with the group strategy.

8. Anticipate needs
Change management is essential. Make sure you don’t leave anyone out: any upheaval leads to some resistance, which is often the cause of project failure.

9. Take your time!
On average, drawing up a budget takes eight months, even longer for very large companies. Don’t rush it…

10. Think intuitive
The tool selected should prove as simple as possible for the end user. You’ll win them over to the project more easily.

Micropole is at your side throughout your project, and at each of the key stages listed above.

1FPM: Financial Performance Management