What's the best way to choose a budget and forecast timeline?

Budget and forecasting timeline can also be influenced when you expect any possible macroeconomic changes to be announced. If your government financial cycle isn’t align with the company’s cycle, then your first forecast or latest estimate could be when your government financial year commences. This allows you to refine your assumptions and update your budget with new tax measures, inflation projections, industry growth information or any other relevant insights. I performed 2 forecasts; Forecast 1 which is from April to December, forecast 2 which is from September to December. The business results are always compared to budget, forecast 1 and forecast 2. The timeline may vary for each company but at each cycle, make sure it’s accurate.

Communicate with all Finance module leaders and emphasize the high importance of monthly closing, and the quality of cost centers allocation, and distribution regularly. Commit with presenting monthly positions to each department/team. Communicate with each budget holder to present their one year needs on particular deadlines to give some space for final budget and decision makers approval.

Algunas recomendaciones: 1.- Estrategias de Gobierno Corporativo: Asegúrese de que su proceso presupuestario esté alineado con las estrategias del directorio. La transparencia y la rendición de cuentas son esenciales para mantener la integridad y cumplir con los estándares de gobernabilidad. 2.- Evaluación de Impacto en RR.SS.: La reputación de la marca en las RR.SS. puede influir significativamente en los ingresos y gastos. 3.- Uso de Herramientas Analíticas: La AI y el análisis predictivo ofrecen perspectivas más precisas, especialmente en tendencias y patrones financieros. 4.- Comunicación Proactiva en RR.SS.: Establezca estrategias de comunicación proactiva para mitigar riesgos de reputación que podrían afectar sus finanzas.

If you are a Federal contractor you have a natural budgeting cycle. You need rates to price business in the coming year. Those rates need to reconcile to the budget and the long-term plan. If you need Board of Directors approval of the annual operating and long-term plan, you can back off from when those approvals need to happen (typically in December for a calendar year end). A budget and annual operating plan will typically take 3 -4 months to put together. Therefore, starting around mid-July the Annual Plan can be approved by management to take to the Board in November. The departmental budgets can start around the same time. Government rates would be built in November.

Selecting a budget and forecast timeline involves careful consideration of various factors to ensure accuracy, relevance, and alignment with your organization's goals. Understand your company's business cycle and strategic objectives. Align your budget and forecast timeline with key business events, such as product launches, sales cycles, or expansion plans. Determine how often you need to review and revise your budget and forecasts. Assess the availability of accurate and up-to-date financial and operational data. Consider the availability of resources, both in terms of time and personnel. Evaluate how frequently your organization makes major financial decisions. Choose timeline that allows your organization to learn from past performance

Budgeting and Forecasting is by nature an ongoing process, there is no definite timeline. You are constantly updating information and generating new forecasts. What we usually refer to as a Budget is nothing but a time defined forecast (usually 12 months in length) that will be used as a guide. In my experience, after the first 3 months of the defined time period, so many internal and external factors have changed that the budget is basically no longer valid and we are looking at new forecasts.

To define a budget schedule, it is necessary to look at the company's reality and the particularities of the business. On average, a period of 12 months is budgeted. But for some companies it is higher. As well as the start date is interspersed with the fiscal or business cycle.

The toughest part about budgeting and forecast is often the availability and accuracy of required and relevant data. In my experience, this is an areas companies don’t spend much resource in maintaining as it’s not revenue generating. But when budget and forecast cycles roll around, the FP&A function runs around like chickens with their heads cutoff trying to make do with best available data and assumptions. Corporate finance professionals need to put a monetary value on having clean and relevant data. Better data will induce accurate budget and timely forecast as well as identify key areas of focus to drive the bottom line.