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How To Align Your Budget With Your Business Goals

October 7, 2020 | Evan Webster

Whether you’re playing a game of chess or helping to grow a business, strategy is key to making every move the right one. So how do you decide your next move when you have no visibility into the strategy at play?

If you’re part of a finance team, you may find yourself in exactly that position during budgeting season—building out your budget without a strong view into business goals and objectives. Without that, you’re left moving your pieces and assuming the game hasn’t changed, making critical decisions on where to allocate resources for operations and growth without any kind of roadmap.

That’s why budget alignment with business strategy and KPI or goal setting is a critical part of a successful budget—and key to achieving your organizational goals. It’s also how you ensure you have the right resources and team in place as you work to meet your overall objectives, reallocating resources as necessary to meet those goals.

Budget alignment will empower your organization to reach its strategic goals—and that’s something the whole company can get behind. So how do you make that happen? In this blog post, we'll look at:

  1. Why should your budget be aligned with organizational goals?
  2. 3 steps to achieving budget alignment

Why Should Your Budget Be Aligned With Organizational Goals?

If you don’t have visibility into your organizational roadmap already, it may be time to start advocating for it—or even asking for a seat at the table so that your team can fully support your business goals from beginning to end. When making your case, consider three reasons why your organization should be making alignment a top objective this budgeting season:

1. You’ll make the budgeting process less of an administrative task

When true alignment is achieved, your budget moves from a job that needs to get done to become an operational extension of your overall strategic planning process.

2. You’ll allocate resources more intelligently

Even in high-growth companies, resources aren’t infinite—and spending them unwisely is just unhealthy business practice. Every leadership team is going to have to make tough decisions on where to spend and where to cut as well as what operational and growth initiatives are worth investing in. Budget alignment helps you prioritize or provide portfolio options for that spending so that financial allocation decisions are based on your company objectives—and not just the loudest voice in the room.

3. You’ll have more money when you need it

Without a deep understanding of company strategy, your finance team won’t be able to model or advise on resource requests, including the headcount, tools and other resources that will empower your organization as it turns strategy into results. Teams will be left scrambling when the time comes—something that can lead to employee burnout and stunted progress, or force teams to adjust plans in a silo to accommodate for the resources available rather than taking a holistic organization-wide approach.

Without alignment, it’s easy to spread your money too thinly across too many projects and end up without enough cross-functional resources to get things done across the line. It’s in the best interests of everyone in the organization, then, to make sure alignment is achieved.

3 Steps To Achieving Budget Alignment

What is the relationship between strategic planning and budgeting in your organization?

If a strategic plan outlines where your business is going, the right budget should smooth the path—allocating resources holistically to operationalize your strategies. The following steps can help achieve that, to ensure your budget supports your organizational goals:

Step 1: Keep Your Eye on the Long Term

Whether you budget annually or have a rolling budget, your long-term strategy should be a sounding board to your process early on so that you’re able to prioritize the right resources and programs. Most business goals are going to take longer than a year to reach fruition so even an annual budget can’t take into consideration the full picture. By keeping strategy front of mind during all of your team’s long-term planning, you’ll be able to ensure it trickles down to fuel your ongoing budgeting needs. But how do you do that?

Step 2: Get Your Leaders Involved Early

Ensuring your budget is fully aligned with your latest company goals means getting your executive team involved early—whether that be in the strategic planning process or in the subsequent budgeting process itself. Ideally, this will provide the transparency and insights necessary for your team to allocate resources accordingly. But it’s not always as easy as it sounds. So how do you make that executive involvement happen?

Step 3: Measure Your Success and Repeat It

Identify the metrics critical to measuring progress on your company objectives to better understand how your budget is helping you achieve them. Both financial and non-financial metrics will be key to understanding how your budget is succeeding—and give you the insights you need to adjust the next forecast or plan and to make rolling changes based on what’s working and what’s not. Visibility into these metrics and successes will also help drive buy-in to the budgeting process and give cause to align it with your strategy. But where should you start?

With executive involvement, a view to the long term and ongoing measurement along the way, you’ll be able to build better alignment into your budgeting process and put your company on the right path to strategic growth. 

Just remember, aligning budget to strategy isn’t just a “nice to have.” It can make the difference in whether your company achieves its larger objectives—and how fast it meets those goals.

Find out how Vena can help you build a better budget.

Evan Webster

Evan Webster

Evan Webster is a creative storyteller with a passion for innovative technology. As a Content Marketing Specialist with Vena, Evan is always experimenting with new ways to inspire finance professionals so he can help them thrive in their roles as strategic, forward-thinking business partners.

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