It’s hunting season again. The hunt for the 2020 annual budget has begun. The Excel sheets are being diligently worked on again. And the CFO is already blowing a savings attack. And, as is so often the case, HR tends to be at the back of the line when it comes to issuing budget hunting licenses. Here are the ten most important tips to keep the CFO away from running the gun.
One story, one budget
Your budget must always be based on a clear story. Where are you from? Where you go? What do you want to achieve in the next year? Those who start the budget discussion by answering these questions have an advantage.
Your budget – part of the corporate strategy
Your budget and your story contribute to the company’s goals.
Make your CFO aware of the connection between your budget and the underlying business value as well as the strategic goals of the company. Example: “We want to increase sales by 20 percent next year and hire ten new engineers. To attract the best from this target group, we need more presence as an employer. We have therefore planned three events and need an investment of 18,000 francs. ”
Concrete fields of action
The more specifically your individual fields of action and the associated budget items are described, the better. 5000 dollar for “Internet activities” are easy to question. A package of measures to recruit ten highly qualified engineers directly from the university is much easier to defend.
Create added value
Clear, fact-based objectives are associated with every budget item. Achieving the goals should generate added value for the company. I do not budget any employee events. I budget for two innovation workshops with the aim of generating five new ideas for process optimization in the company.
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Put your budget in the context of the company’s total expenditure, total personnel expenditure, recruitment costs, or the number of cases to be processed (number of recruits, number of training events, etc.).
Work with facts and figures – your CFO will appreciate it! Relate the budget to last year’s expenditure and use this as a basis for argument:
What worked well and needs to be strengthened? What was missing? What worked less well and can be reduced?
And what happens if we cut this budget?
When a budget item is questioned, you need to have a clear answer.
What happens if you don’t spend that money? Here, too, facts count. Answers like: “Then we have to forego the planned measures for leadership training. These were clearly demanded in the employee survey. The demands can also be recognized by poor ratings on the social platforms.
Our image as an employer will continue to deteriorate. The vacancies will remain unfilled for a long time. ”
Never talk about costs
We always talk about investments. Extra budgets aren’t extra costs – they’re options. These are linguistic nuances. However, these are crucial when it comes to performing a function such as HR, which in the eyes of many is only a cost generator and “money burner”.
Your CFO is your friend
Include all decision-makers and especially your CFO in budgeting at an early stage. A CFO is someone with a background and possibly a master degree in accounting. Don’t make them your enemy. Treat them as your friend and you’ll have a better chance at doing your job.
Better too much than too little
Always plan the budget “optimally” with a 10 to 15 percent reserve. This gives you room to negotiate and your counterpart a hunting success.
Well prepared is half the battle
Prepare for the budget discussion. Put yourself in the CFO’s shoes: where would he cut back? What questions would he ask? Invite a colleague to play through the budget discussion with you!
In the now very unlikely event that your budget is shot anyway: Leave your options open. Make time for yourself to come up with a new proposal.