If your company year ends in December, then as we are approaching August, you may be starting to think about your annual budgeting process for 2026. But, if you are like one of my clients in Australia, whose fiscal year ends on June 30, you probably started your budgeting process in March, and put the final touches on it last month.
But realistically, this isn’t an either/or situation.
Business planning and budgeting should be an ongoing process. The most important factor is that you do it. And if you and your team haven’t started planning for this year’s holiday season or next year (2026), then there is no time like today to start.
As a starting point, you should review where you are now. A simple Excel spreadsheet with top line revenues and bottom line gross profit dollars is a good place to start. I always recommend having current monthly (or weekly) numbers, and comparing them to the previous year and to your plan (budget). If you were over budget then color code the numbers in green, and if you were under budget, color the numbers in red. It makes seeing how you are performing easy to discern at a glance.
Adding a column for percentages is also helpful. But don’t be fooled by only looking at percentage increases. That’s why I like to look at dollars, percentages and in some instances, units (or cases).
To me, however, the most important detail about budgeting and planning is to make sure a single person is responsible for each line on your spreadsheet.
For example: For top line revenue – “who owns that line?” Is it the sales manager or VP of Sales? I find it helpful to break down your revenue numbers by territories, so you can ask yourself “is there an account manager responsible for each territory?”
Between the top line revenue and bottom-line gross margin, you likely have operating costs. Who owns that line? Is someone managing your operating costs and labor costs? Do you have a budgeted plan for dollars and percentages?
Honestly, it doesn’t have to be complicated. In fact, the simpler your dashboard is, the more likely it is that your team members will understand. It should not take a CFO-level person with an MBA to understand your budgeting spreadsheets.
Realistically, however, the critical factor is that you and your team review the numbers, together, regularly. If you track your numbers weekly, and color code them red (below forecast) and green (ahead of forecast), you can make the subject of your weekly planning meeting about what specific actions need to be taken to correct any shortfalls.
That’s where most companies fall down.
Mistake #1: They assign the budgeting process to their CFO.
Mistake #2: The CFO creates spreadsheets to their liking and emails them to the CEO/President monthly.
Mistake #3: Department heads don’t have access to the whole picture and operate in a silo.
Mistake #4: There is no discipline in reviewing performance, together, frequently enough to take corrective action.
Results: Companies start to freak out in the 3rd quarter about missing their targets, or realize their assumptions were incorrect, too late in the year.
Does any of this sound familiar?
That’s why business planning and budgeting should be a collaborative effort and be done on an ongoing basis. If you allocate time each month to review your process and results, you can make adjustments to your assumptions and pivot strategically to achieve the financial results you desire.
If you aren’t doing the kind of business planning and budgeting that you want to be, no need to wait until the fourth quarter to “start for next year”. Why not hit the reset button now, and modify your process this month?
There is never a single perfect time to do business planning – so let’s start doing it today.
Onward and upward,
Executive Coaching and Consulting for CEOs, Presidents and Owners in all industries
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