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Is Your Budget Presentation Boardroom Ready?

October 23, 2023
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Your team has spent months creating, adjusting, recreating, and finalizing your budget for the next year. Managers have input their needs and requests for equipment, staff, and training. Sales teams have projected their volumes. You’re finally ready to bring your annual budget presentation to the board.

Or are you?

Is the board going to care that you’ve allocated 20% of IT’s budget for training? Or that accounting has planned $5,000 for a new printer?

Not really, unless those are the answers to some very important questions that the board will be laser-focused on. More likely, these are extra details that will take up valuable time in your budget presentation.

What are the plans for the organization?

This may seem like more of a strategic planning question than a budgeting process one, but the two are intertwined. As you tell your board what your goals are for the business – market growth, additional teams or staff, heavy investment in R&D – they may be excited at the potential of the business plan. At the same time, they will want to know that you’ve considered what it will take, financially, to accomplish those goals.

The easier you make it for the board to connect your strategic plan and your financial plan, the less explaining you’ll need to do to get their buy-in on the budget proposal you’re presenting. Don’t force the board to make the connection themselves. Make it clear that the office of finance has thought hard about how to meet the company’s strategic goals by having a plan in place for financing the activities needed to reach those goals.

Showing your board how you’ve reflected your plans in your budget presentation will be key to getting approval and illustrating that you’ve taken all aspects of your goals into account.

Can you pay the bills?

This may seem like an obvious question, and one that your organization has spent a lot of time answering with your budget plan. But it is one of the core responsibilities of your board: to make sure that the company is being fiscally responsible while meeting its goals.

A company has responsibilities to its vendors, employees, and investors. Funds are needed to keep the business operational. Your budget should account for your expected expenses, where and how much income you’ve projected, your current cash position, and your investments.

Look at your current budget to understand what these outflows look like today as you start the planning process. During your budget presentation, you should be able to speak to how the organization’s financial responsibilities might change in the coming year. You should be able to talk about how you intend to meet the business’ needs if there is no change, but adapt to changing circumstances if required.

With this information, the board will be in a better position to approve your budget or guide you toward more solid standing.

Are your income projections reasonable?

It’s easy to be optimistic about sales – or pessimistic if you’re coming off a particularly difficult year. When the board reviews your budget, they will want to understand how much risk is associated with your income projections.

To get board buy-in, be prepared to present data to support those projections. That data could be actuals from previous years, competitor performance analysis, or forecasts based on big data and business intelligence. Wherever your information comes from, it should be presented in a format that makes sense to the board.

What happens if it all goes wrong?

Plans go awry. Sales flop. Products unexpectedly take off. Your board will want you to show that you’ve considered a Plan B: What will the business do if things don’t go according to your budget forecasts?

Having what-if scenarios prepared for board review will build confidence in your budget. Your board will understand that you’ve got a plan in place should the winds change and you need to set a new course. With alternative scenarios, the board will have a clear view of how closely you’ll be able to keep to your “most likely” (aka approved budget) scenario, and how you’ll continue to achieve your business goals in the face of adversity.

Is your budget presentation tailored to your audience?

While your board may be business savvy, they aren’t in the weeds on the day-to-day operations of the business. You can’t assume that they have information that will help them understand your budget presentation. At the same time, you don’t want to bore them with a heavily detailed PowerPoint presentation.

The key to presenting everything discussed above is to make sure you’re taking your audience into account. Don’t overwhelm with detailed line items, but be prepared to answer questions about them. Offer a high-level overview of the financial plan with easy access to details if needed.

It’s also important to remember that different people respond positively to different information delivery methods. While some board members may want to see financial reports and columns of numbers, for many others it’s easiest to see data presented graphically in charts and graphs.

Do you have the right graphics to go with your numbers?

Graphics make it easy to visualize the relevant data, and to analyze how performance and expectations measure up against KPIs. If you aren’t using a tool that easily creates dashboards and graphical reports for you, it may take extra time to prepare your budget plan to make it easy to read. This is time well spent, as the clarity will lead to more focused and purposeful questions from the board.

Your board is there to help guide and direct your business, and to ensure that the company is meeting obligations to both business partners and investors. When your budget presentation answers the board’s questions before they’re asked, and presents information in an easy-to-understand format, your board is better prepared to give you the guidance needed to move in the right direction.

Centage lets you build detailed, boardroom-ready budgets and forecasts without all of the manual copy/pasting and formula errors. Test multiple scenarios, generate accurate and automated forecasts, and present your budget with total confidence. Book a demo today.

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