Agile Budgeting: Improving Your Budget Process

This month, we continue our conversation about budgeting. In our previous article, we explored the tension between agility and control - how annual rigid budgets can stifle innovation and lock teams into outdated assumptions.

Yet, many leaders still hesitate to fully embrace agile planning due to one core concern - How do we balance flexibility with accountability?

Below, we look deeper into maintaining fiscal discipline and strategic alignment when moving beyond the traditional budget cycle.

‘Free-for-All’ Fears

A common concern is that moving away from annual budgets might cause uncontrolled spending, with teams chasing pet projects that lack clear justification. CFOs often see this as a risk, even though they recognize the value of greater responsiveness.

In our previous discussion, we noted how some companies change to 90-day or rolling cycles to remain agile. While this can enable quick reallocation of resources, it also requires processes that uphold accountability, such as ensuring teams don’t lose sight of the bigger picture or critical profit targets.

Guardrails for Agile Planning

To ensure that flexibility doesn't come at the cost of fiscal discipline, implementing clear guardrails can help maintain accountability while enabling agile planning.

1. Threshold-based reviews - establish a policy that spending above a certain threshold automatically triggers scrutiny. This keeps larger investments aligned with broader company objectives.

2. Rolling forecasts with accountability checkpoints - monthly or quarterly re-forecasts should include short, structured reviews. Budget owners don’t just present updated figures, they should explain how each change supports long-term strategy.

3. Clear ownership and ROI tracking - assign each major project or cost center to a dedicated owner who tracks performance in real time. These owners compare progress against agreed ROI targets and can make quicker, data-driven pivots if something isn’t working.

Bayer's Journey

Bayer’s decision to replace annual budgets with 90-day cycles shows how agile planning can improve flexibility while maintaining accountability. Under CEO Bill Anderson, the company shifted away from traditional budgeting, which he criticized as “bureaucratic and outdated,” going instead for shorter cycles that allow teams to realign resources with current priorities.

To ensure accountability, Bayer implemented frequent review mechanisms requiring teams to justify reallocations during each cycle, keeping adjustments aligned with corporate strategy.

The process also fostered cross-functional collaboration, reducing silos and ensuring resources were directed toward shared goals.

Though some teams initially struggled with the faster pace, Bayer’s emphasis on outcome-focused tracking, prioritizing ROI and strategic alignment, has helped the company adapt to real-world changes without compromising discipline.

This example highlights how shorter planning windows, paired with clear guardrails, can balance agility with control.

Looking Ahead

Balancing agility with accountability means having the right amount of oversight. If you’re considering more frequent re-forecasts or shorter cycles, think about which safeguards, thresholds, and review mechanisms will ensure fiscal discipline. When combined with robust accountability checkpoints, you’ll have the flexibility to adapt quickly without losing control.

Let us know your thoughts in the comments below. We'd love to hear about your experiences and best practices.