Your team is divided on budget forecasting methods. How can you align everyone's approach for success?

1 Align Interests

Understanding the diverse interests of your team members is the first step toward alignment. Each member may favor a particular budget forecasting method based on their experience, the size and complexity of the budget, or the industry sector. It's important to recognize that each method, whether it's zero-based budgeting, incremental budgeting, or a rolling forecast, has its advantages in different scenarios. Encourage your team to share their perspectives and insights on how each method could benefit your financial planning. This openness will not only educate everyone but also reveal opportunities to integrate different approaches for a more robust forecasting strategy.

2 Evaluate Methods

Once interests are aligned, it's time to critically evaluate each budget forecasting method. Zero-based budgeting (ZBB) starts from a "zero base," with all expenses needing approval, whereas incremental budgeting adjusts the previous period's budget by a certain percentage. Rolling forecasts update budget predictions regularly throughout the year. By comparing these methods against your team's goals and constraints, you can assess which will provide the most accurate financial outlook. Consider factors such as the time available for budget preparation, the flexibility required to respond to changing market conditions, and the level of detail needed for decision-making.

6 Monitor Progress

Finally, it is vital to monitor progress and make adjustments as necessary. Establish a system of regular check-ins to review the effectiveness of the forecasting method in practice. If certain aspects aren't working as expected, be prepared to iterate and refine the approach. This ongoing evaluation allows your team to stay aligned and responsive to both the organization's needs and the dynamic nature of financial markets.