Flexible Budgeting and Forecasting (George Bennett at University of London)
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Delivered at ELN's Finance Leaders Event on Thursday 10th November 2022. "Almost every organisation collates and presents an annual budget. This ‘all hands on deck’ exercise is a significant draw on resources in the finance team and beyond, and, due to the governance processes involved, is often out of date by the time it’s finally approved, meaning the work has to start all over again. This talk will briefly cover some ideas on how to make the budget and forecasting process more directly linked to the organisation’s strategy, streamline its preparation, increase buy-in from within the organisation, and ultimately increase its usefulness to organisational decision making."
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Flexible Budgeting and Forecasting (George Bennett at University of London)
- 1. Flexible Budgeting and Forecasting Thursday 10th November 2022 George Bennett Head of Finance (Corporate) University of London george.bennett@london.ac. uk
- 2. Flexible Budgeting and Forecasting - University of London - Federation of 17 London Universities - 48,000 distance learners - Property portfolio - Halls of Residence, Commercial Property, Office & Administrative Buildings - Francis Crick Institute - Implemented a completely new approach to budgeting and forecasting - You do not need new software to implement a more flexible approach
- 3. Budget Cycle Traditional Flexible Done as a big ‘one-off’ exercise once a year Continuous revision of plans Put a page of numbers in front of a director Talk about what they’re going to do, and what’s changed since you last spoke Cost centre by cost centre, GL account by account Drivers “How can you deliver £X more income?” “What can you do differently?” “What worked well vs. what didn’t?” Finance is ‘done to’ the business Finance partners with the business
- 6. Benefits Instead of a big one-off exercise, build planning for the future into all conversations with budget holders. Have a rolling forecast which you update for the latest position. Keep refining what you’ve done. This will be hardest when you first start, but it’s worth the effort to set yourself up for the future. Makes ‘on the fly’ scenario planning much easier as the interdependencies are in-built in your model. Improves finance’s reputation in the organisation – people will come to you for help.
- 7. Q&A
Editor's Notes
- 2-3 mins
- 5 Mins Don’t need to read this out – just talk about the ‘old-school’ way of doing it vs. the more flexible way of doing it Use examples of drivers Don’t have time to talk about ‘good practice’ business partnering in detail – but happy to discuss
- 2 mins This is not talking the director’s language Talk about the risks You take this away, present to FD, CFO, FinCo, Board
- 3 mins This *is* a bit easier for directors to understand Have things in the background – this is a simple example Take this out to directors and build this into a bigger model – you can make edits on the fly Can easily roll this out to cover more than 1 year
- 5 mins
- Remaining time – if I’ve over-run we can skip this