How do you report your budget and forecast's value and impact?

In my monthly report, I use waterfall charts to show the delta of actual vs plan with concise commentaries. It is helpful too to highlight the actual vs plan KPI's to support how they influence the cost. This format helps the key stakeholders to align the cost with the KPI's and challenge improvements or it may identify risk and opportunities.

Our profile keeps on evolving with changing business environment, business needs and improving perspectives. While the Financial KPIs are a key, we try to use charts, waterfall which give better explanations and help understand the stakeholders as to how they can influence and control the outcome.

We report budget and forecast value and impact by comparing actual financial data against budgeted and forecasted values. Highlighting key variances and their causes by using charts and graphs for clear visualization. We even provide a brief narrative explaining variances and their impact. We summarise findings, discuss future implications, and recommend actions for clarity and focus.

Visual representation is impactful here. We use waterfall chart to show and explain major reasons driving the dip / upside. It also bifurcates the commercial and operational reasons.

I fully agree with this. Audience is the first thing we must consider before we present the budget and forecast. For example, when I presented budget of manufacturing costs to Supply Chain director, he required so much details on how I built up the numbers, what assumptions, who involved, and actual current run rates by cost category, which enabled him to clearly understand about his budget. On the other hand, when I presented the same thing to CEO, he just cared about Supply Chain KPIs, cost saving targets vs last year, and how much those numbers contribute to P&L as a whole. Therefore, acknowledging your audience might drive the result of your presentation as well as your performance involved, hence crystallise who they are first.

I agree with Antoinette. If you have good, tangible, relevant KPIs that are aligned with your budget then it is easy for management to see the value. It becomes far less of an abstract exercise.

Normally when I present budget and forecast, I am asking for management approval, so in my experiences, I usually showcase historical data by year, by category in the P&L, cashflows, balance sheet, and then the assumptions which is base to build up the outlook, meaning the balance of the current year, and next year.

What is the value add to doing a forecast? It takes time and systems and therefore a financial investment to produce a forecast or budget. The value in 1) accurate predictions which are measured by 2) reporting results and analyzing areas for improvement. That could be improvement in the forecast itself - the calculations or questions you are asking stakeholders. Or that could be improvement in the business routines if there are not, for example, approval processes in place to inhibit out of budget spending. Accurate predictions allow for downstream planning of profits, cash flow, investments and other cost or revenue initiatives.

In my opinion, when I was preparing a budget in a ppt, there were a lot of parts to be considered before presentation. For instance, first and foremost, Executive Summary, which gives a narrative of actual results and business outlook, then macro-economics related to business transactions. The next part should be a snapshot of financial statements in high level, and then key assumptions used to built up those numbers. Also, breakdown analysis of volume, revenue, COGS, margins, SG&A by category, and operating profits being stated. In addition, risk and opportunity should be analysed and presented next, which might impact to budget and forecast, along with relevant mitigation plans.

Numbers are not the only way to convey budget and forecast to the audience, there are also charts, tables, traffic lights to visualise the impacts and results, for example. Choosing the most effective visuals is important here, because it depends on the kind of information and numbers, we should select the right one. We might refer to industrial data and/or competitors to choose the right visuals for our presentation.

Additional points to consider when presenting your budget and forecast: 1) Beware of macro-economic factors, for example, monitory policy, inflation, exchange rate fluctuation, unemployment trend, etc., 2) The industry insights 3) Key competitors 4) Political environments