Budgeting: the process stays yours, the admin can move

Key takeaways

The budgeting process in a small business is a set of choices about where money and effort go next year, and those choices stay with the owner. The admin around it moves well: pulling last year's actuals, building the template, consolidating inputs and producing monthly budget-versus-actual reports. Start six to eight weeks before the year begins.

• Setting targets and priorities stays with the owner.
• Data, templates and consolidation can be outsourced.
• Start six to eight weeks before the financial year.
• Monthly budget-versus-actual reports keep it useful.

Why does the budget itself stay in-house?

A budget is a set of decisions: how much to grow, where to invest, what to cut, what margin to aim for. Those decisions carry the business's risk and need knowledge of its plans and people. A provider can model options, but if someone else sets your budget, you have outsourced your strategy.

• Which business processes should you outsource?
• Should you outsource pricing? Why the decision stays in-house

Which budgeting tasks can be outsourced?

The preparation and the follow-through. Pulling actuals by month and category, building a template, collecting and consolidating managers' inputs, checking they add up, and producing monthly reports comparing actual with budget. These take hours each year and are rule-based once the structure is set.

• Pull last year's actuals by month.
• Build and maintain the template.
• Consolidate managers' inputs.
• Report budget against actual monthly.

• Budget variance analysis: why actual costs miss the plan
• Management accounts: outsource the pack, keep the review

What is a simple budgeting timetable?

Eight weeks out, pull actuals and set the template. Six weeks out, the owner sets targets and priorities. Four weeks out, managers submit their numbers. Two weeks out, consolidate, challenge and agree. In the first month of the year, load the budget into reporting so monthly comparisons start straight away.

• Zero-based budgeting for small businesses: a practical guide
• Cash flow forecasting: outsource the model, keep the calls

When is outsourcing budget admin not worth it?

When the business is small enough that the owner can build the budget in a day from the accounts, adding a provider adds handoffs for little gain. It becomes worth it when several managers contribute, or when monthly reporting against budget keeps slipping.

• How much volume makes a process worth outsourcing?
• Outsource, split, fix or keep: four process verdicts

What does this look like in practice?

A pattern we see: budgets get built carefully in December and never looked at again. The monthly comparison report is what makes a budget useful, and it is the easiest part to hand over.

• See client work
• BPO Solutions for UK businesses

Budgeting checklist

Use these steps each year.

• Pull actuals eight weeks before year start.
• Owner sets targets and priorities.
• Managers submit numbers on a fixed date.
• Consolidate and challenge.
• Load the budget into monthly reporting.
• Review budget against actual each month.

• Finance processes to outsource, and the ones to keep
• The process selection score: outsource, split or keep?

Next step

Tell us when your financial year starts and how you budget today. We will suggest a timetable and tell you which admin we would take off your hands.