Video transcript:

Trish Shannon, CPA, CGMA, CFO of the AARP Foundation

It's really important for folks to understand the budgeting process, and for the accounting team and the finance team to make it as simple as possible. And it can get very complicated, but I think the mantra should be, "Simplify, simplify, simplify."  And the other thing that I found in my experience and my career that's helpful is to not have just a once-a-year budgeting process. Things change by the time you prepare the budget and when it gets approved by your board of directors to when the year actually starts and you get into it, and you could have, you know, many months go by, the environment changes, and that budget that you prepared and had approved six months ago is no longer relevant. So, another tool that I think is really important for organizations is to have a quarterly forecasting process. So you actually go, review, okay, did the revenue come in as we expected, are we ahead, are we behind, and adjust your forecast accordingly so that you make sure you're spending your money appropriately towards your mission.

It's important to have a strategic plan that's clear, the objectives are measureable. But once you align the strategic plan with the budgeting process, you should be able to identify what the priorities -- the programmatic priorities are -- or priorities overall -- what they are for the organization, and getting the leaders of the organization together to make sure that the budget is going towards those priorities. And I think that's the key, matching the strategic plan with the budgeting process. Often times, those two teams are separate, and they each -- the plan and the budget get prepared in isolation, and it's really important to merge those two and have a common plan and budget during the budgeting cycle.

Sandy Sloyer, CPA, CGMA, CFO of Caring Hospice Inc.

Resource allocation is much more than just budgeting, it's taking a look at the strategy of the company, the strategic plan, the initiatives that are out there and looking to see where the resources exist and how we can align it. A lot of companies need to remember to start with their mission and then look do a SWOT analysis, where are the strengths, where are the weaknesses where are the opportunities and threats. And then once you develop those objectives and those items, then look at what are your resources, and as you are going through the budgeting process, make sure that each resource is aligned with what the strategic plan is and it's being proactive with the department heads and being involved with everyone doing their budgeting and continuing to have that message and that bright light that says are we doing something that’s valuable? Is it going to make a difference? Does it fit with where we want the company to go?  And by continuing to ask those questions, and being willing to say yes this is what we need to do, or no it really doesn’t fit, that’s how we can add the value and make sure that the resources continue to be aligned with the strategies of the organizations.


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