Budgeting can be very emotional. It can also put unit managers through high-pressure cycles of “hurry up and wait.” One company calls its budgeting time “hell month.” The term is apropos, especially for first timers.
Emotions stem, first, from time pressure. Many budgeting processes can be aptly described by the adage, “There is never enough time to do it right, but always time to do it over.” Budget spreadsheets flow up and down an organization. As one level after another reviews your budget, you will have to sit back and wait. Then you will be asked to make a modification—quickly, quickly. And then you will resubmit the budget, only to find yourself waiting again to hear.
At each step, you may be asked to justify your figures. Your manager has to undergo this kind of review, too. Indeed, one of the reasons you may experience pressure is that your boss is both a reviewer of your budget and a submitter of a budget, which also has be approved, and on and upward. Consequently, you, your manager, and your manager’s boss may get emotional under pressure. There are many “can, cannot” discussions before formal budgeting begins and even more once it starts.
As a first-time player in this multidimensional guessing game, you need to appreciate the emotional pressure everyone is under and try to remain as calm and collected as you can.
During this period of unrest, the following precautions will help you:
- Keep careful notes of the assumptions, reasoning, and calculations behind your budget submissions. You may have to make several adjustments, and a few weeks after the fact, when a particular number is attacked in a new review, you will be expected to remember how you arrived at it.
- Put your budgeting form on a computer spreadsheet. This will make it easier to track each revision and the reasoning behind it. If done right, it also eliminates arithmetic and multiple-entry errors. Don’t underestimate the potential for embarrassing math mistakes.
- Expect the costs in your first submission to be cut. Depending on your organization’s financial situation, the first cut may not be the last, either.
Therefore, fight back if you are pressured to cut a cost to the bone. If your costs are cut beyond what is required to do the job, say so.