How do you incorporate feedback and learning from your previous expense budget cycles into your future ones?

1 Review your actual expenses versus your budgeted expenses

The first step to incorporating feedback and learning from your previous expense budget cycles is to review your actual expenses versus your budgeted expenses for each period. This will help you identify any variances, gaps, or errors in your expense planning and execution. You can use various tools and methods to compare your actual and budgeted expenses, such as spreadsheets, reports, dashboards, or software applications. The key is to analyze the causes and effects of the variances, and to document your findings and recommendations for future improvement.

2 Evaluate your expense performance indicators

The next step is to evaluate your expense performance indicators, such as expense ratios, expense efficiency, expense effectiveness, and expense variance. These indicators measure how well you manage your expenses in relation to your revenue, goals, benchmarks, and standards. They can help you assess your expense management strengths and weaknesses, and identify areas for improvement or optimization. You can use various formulas, metrics, or tools to calculate and track your expense performance indicators, such as expense to revenue ratio, expense per unit, expense per customer, or expense variance percentage.

3 Solicit feedback from your stakeholders

Another important step is to solicit feedback from your stakeholders, such as your employees, customers, suppliers, partners, or investors. Your stakeholders can provide valuable insights, opinions, suggestions, or complaints about your expense management practices, processes, policies, or systems. They can also help you understand their needs, expectations, preferences, or challenges regarding your expenses. You can use various methods to solicit feedback from your stakeholders, such as surveys, interviews, focus groups, reviews, or feedback forms.

4 Update your expense assumptions and forecasts

Based on the feedback and learning from your previous expense budget cycles, you should update your expense assumptions and forecasts for your future ones. Your expense assumptions and forecasts are the basis for your expense planning and allocation, and they should reflect the current and projected realities of your business environment, operations, and goals. You should review and revise your expense assumptions and forecasts regularly, and adjust them according to the changes in your internal and external factors, such as market conditions, customer demand, supplier costs, regulatory requirements, or strategic objectives.

5 Implement your expense improvement actions

The final step is to implement your expense improvement actions, which are the specific steps or measures that you take to improve your expense management performance and outcomes. Your expense improvement actions should be based on the feedback and learning from your previous expense budget cycles, and they should address the root causes of your expense issues or challenges. You should also monitor and evaluate the results and impacts of your expense improvement actions, and make further adjustments or corrections as needed. Some examples of expense improvement actions are: renegotiating contracts with suppliers, reducing waste or inefficiency, automating or streamlining processes, or investing in new technology or equipment.