A Cure for the October Budget Freakout

Another mid-October has rolled around and there you are, just starting your budgets (despite my many warnings!). Some of you may have not started at all. Or, perhaps you have very recently received new accounts all needing budgets, fast. Of course, in the meantime your day job doesn’t stop; there are meetings and phone calls and emails. What to do? First…

DO NOT FREAK OUT! A lot of managers freak out about budgets, and there really is no need. Remember (I just can’t say this loudly enough) a budget is an estimate and a guide, and you are preparing one for the Board to review and accept as is, or adjust to meet their needs. You want to present your best-educated estimate, but budgets are not written in blood or stone. The weight of the world does not rest on your presenting 7 or 9 perfect budgets to your Boards. They will never be perfect and 75% of the time someone is going to change something before the final budget is adopted, so chillax! If you follow my 11-step guide to getting budgets done, you will see how easy they can be.

Make time, locate, plan, sort, focus and execute

1) Make time to work! Clear your calendar for 6 hours. Put your email auto-response on and answer nothing. Now, add a new voicemail to your office and cell phones indicating the same. Put both phones on silent. Get your water, coffee, 5-hour energy shot or whatever, stop everything else and get ready to FOCUS on the task at hand.

2) Pull all of this year’s budgets. I’d do hard copies, but if you can do this on a desktop, have at it.

3) The time plan: We are going to allow ourselves up to 1 hr. per budget for the hard ones and 30 minutes for the easier ones.

4) Sort: Make 2 piles. Pile (or file) # 1 is the easy pile. All budgets you know will not change, or change simply in moving dollar amounts in line items (no increase), or those which you will recommend a simple 3% increase to cover the bases and yourself. These are budgets that you can simply reproduce almost as they are for the following year. Stop thinking about these budgets immediately. Now:

Next: Pile (or file) # 2 is the time consuming pile. The remaining 2-4 budgets should be sorted in order of their importance – which can consist of one, or more, of the following:

• Complicated budgets with dozens of line items;
• Assessment increases that will require a vote of the membership;
• Political considerations: Boards that don’t get along, difficult and contentious membership, slow budget committees, weak Board president, very vocal minority of anti-HOAers … you know the drill… anything that will drag the process out.

5) Start budget work. Now that you have that sorted your budgets in order of importance, start working on pile, or file, # 2 (the more difficult budgets):

a. Start with the most complicated budget (for whatever reason) first.

b. Pull up the last 8-10 months of expenses v. income and examine them month-to-month. What are the anomalies, and why?

c. Make calls to the major contractors and business partners (some may overlap from community to community – 2 birds with one stone?) on whether or not there will be an increase. Using last year’s budget, start plugging in your new estimated numbers.

d. Google the projected utility rates for the coming year.

e. Stay organized as you work. Keep a running list of “to do’s” for the items in process (waiting for call backs, etc.) that must be accomplished prior to sending the budget on to the Board.

f. MOST IMPORTANT: STAY FOCUSED – DON’T CHECK EMAIL, TEXTS OR CALLS.

g. Quick Tips: Do the best you can on a budget for the allotted 60 minutes. If it looks like a lot more time is required, set that budget aside and move on to the next and come back to this budget later. If your office software doesn’t help with budget development, use Microsoft Excel. It greatly speeds up the adjusting and adding processes not to mention cool charts for eye catching presentation.

The worst is out of the way; let’s move to the next pile.

6) Start work on pile (file) #1. This is going to go fast as we already know not much is changing and we only have 9-15 line items to review per association.

a. Review income v. expenses.

b. Revise as needed.

c. Use your pile #2 research to adjust for inflation or other cost increases.

d. Stay organized by keeping a running list of to do’s if need be.

e. Success!

By the end of your 6-hour budget prep marathon, you should have a pretty good handle on all of the more complicated budgets; in fact you may have had time to crank out 1 or 2 of the simpler ones. So you are not quite done with all the budget work yet, but the hardest part (getting started!!) is over. Now we will plan and do the clean up work.

7) Over the subsequent 7 – 10 days block out 45 minutes each day to work on the remaining budget problems and adjustment for new information. Make sure and manage your incoming communication during these times – stop all emails, texts and calls; it’s the only way you will get the work done with any semblance of focus and sanity.

8) Send the budgets to your Boards. As soon as you complete each budget, clear your desk and your mind and send them off to your Boards. Remember, they may make changes and that’s okay. It’s what they do!

9) Keep track of those budgets. Once the budgets have been sent to your Boards, make sure and keep track (calendar dates certain) of when you need them back for timely distribution to the membership. Ensure that the Board knows that date certain. Here’s your absolute Pro-Tip: Ensure that YOU know the “lead time” your company, or contracted vendor, needs to get those budgets out to the membership on time. This is on you.

10) Schedule regular reminders (with that drop-dead date clearly stated) and email them to the Board (or budget committee) that the clock is ticking! If you are really cutting it close, this may have to be daily. Sending reminders helps keeps them on track and, should they blow the deadline, covers you and your company. Yes, sometimes they are late – but that’s another article.

11) When the budgets come back they are ready for the next step, be it distribution to the membership, scheduling of a budget approval meeting (state specific), or a vote of the membership for an assessment increase and the ordering of coupon books. Voila! Another budget season is in the past! *whew*!

The Wrap: The real reason managers get so stressed at budget time is, of course, they didn’t start the process soon enough often due to other work pressures; however, it is a truth that budgets really roll in September and October. Getting them done, and done well, in a short amount of time isn’t impossible, in fact it’s quite doable and with less stress than you’d imagine. So take a chill pill and follow my easy steps to budget crunch success. Of course, I would always recommend starting budgets much, much earlier, but if you are stuck with them now, they can be done well as long as you give yourself the uninterrupted time to focus on them alone and not be lured in to your normal mode of pretending to be multi-tasking. That applies to a lot in our business, but alas, is a whole ‘nother article too!

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