Budget – your bridge into the future
In less than two months this financial year is going to end.
Therefore you might already working on your budget for the FY21 – or you’ll do it soon.
The issue I see here is the big question, how to predict the future in times of major uncertainty.
Your budget is literally the bridge into the future.
How solid do you want to build it?
What are you going to use as a baseline for the next financial year?
Do you use the numbers and turnover from last month? Or the last quarter? Which in both cases most likely might be either too optimistic or too pessimistic.
Or are you unperturbed and you use the quarterly figures from Q2 as a baseline?
Maybe you are in a business that actually grew and thrived through the last weeks of isolation and lockdown.
In any case your budget for 2021 is a big unknown and a good guesswork in the best of cases. Well in truth any budget is a hopeful extrapolation of the past. But in the previous years you had at least a trend and a baseline to work from.
Not this year I’d say.
So what could you do?
In my view there are three options:
- You create a budget for the next twelve months with the aim to review after three months. In other words you put your best estimation into the next three months and make the other nine a hopeful approximation.
- You create a budget for the first three months of the FY21 and hope that by September you are wiser and there is new normal established, which enables you to create a budget for the remaining nine months then.
- You don’t create budget at all and work on an adhoc basis – pretty much like you did for the last four or five weeks.
In any case you are going to use Excel in a way that you have never done before.
You need the budget now, you need it flexible to cater for any last minute changes and you don’t want to carve it into stone anyway.
And this is where it becomes dangerous. Your budget will go through multiple hands. There is a good chance that your budget get changed, edited and amended by many people along the way.
How do you protect your data?
How do you protect the integrity of your model?
How do you audit the final version before presenting it to the main stakeholders?
In fact Excel can give you some protection but not much. Therefore it might be better to have a plan how you could make sure that your budget (as shaky as it might be) is actually meaningful, complete and correct.
I am more than happy to discuss this further with you and support you during this difficult time and process.
Follow this link to find a time in my calendar to discuss your specific needs for your budget 2021.
You know that apart from German and English, another language I speak is numbers.
I focus my time in helping mid to large-sized businesses, structure, systemise and automate their data and Excel models – of course with my German precision.
Senior executives and business owners usually reach out to me when they are overwhelmed by the complexity of their data, find their model is broken or find themselves wasting precious time by doing tedious reporting over and over again.