👋Hey there,
For most FP&A teams, the budget is a distant memory.
But come early August before late summer vacations hit, it will come fast and furious.
Prepare yourself now to make your budgeting process as efficient and effective as possible.
How can you prepare?
Think about company goals, KPIs, and team metrics first.
Tune in to hear about our own budget prep tips (and fails).
Listen on
It’s All About Goals and KPIs
What does your company want to achieve this year, next year, 5 years from now?
This question isn’t just rhetorical—as a leader in your company’s budget process, you should know what your company’s goals are.
Because when you do, it gives your coworkers autonomy to work towards the same common goal.
Which you’ll help distill into KPIs and metrics.
And come budget time, those KPIs and metrics will be your guide to fund:
More resources
Less resources
Brand new ideas
🔥TIP: Here’s a guide on how to think about KPIs (and metrics).
Show Notes
00:21 - Yarty admits Drew is his favorite person—the truth shall set you free!
00:46 - What comes first — Targets or Budgets? (Get your coffee ready ☕)
01:29 - At GE (General Electric), targets came first—keeps teams focused
02:56 - Want your headcount to 4x with flat revenue? Lead with Budget 🆘
04:30 - Start with goals—they can become KPIs, targets, then budgets
06:05 - Avoid wish lists—not a productive exercise when budget deadlines loom
07:30 - Sales will request lower targets—use stretch goals in commission plans
08:50 - A critical FP&A skillset is to CHALLENGE your business partners
09:29 - Don’t scare the sh#t out of Sales with goals stretched too far
10:39 - Understand your sales reps tenure—informs their selling capacity
11:35 - Help your company focus on training to ramp up high-quality hires
12:50 - Leverage tech like ChatGPT to ideate and educate
13:38 - And the winner of Target vs Budget is…
Wishlists Are Dangerous During Budget
There is nothing wrong with wishful thinking.
There’s a time and place to come up with ideas of what’s possible.
That proper time is during your long-term planning cycle, usually when leadership gets together to figure out the 5-year goals of the company.
But during budget season—avoid wishlists at all costs.
Budget season is a time crunch—get tactical by:
✅ Knowing your company goals
✅ Figuring out the KPIs (and metrics) related to those goals
✅ Creating a plan that fits into that framework within reason.
Understand Your Sales Team Members’ Tenure
One useful trick to setting Sales targets is to figure out how tenured your Sales reps are.
You can’t expect rookie Sales Reps to hit the ground running and hit the same quota as your 5-year Sales Team veterans do.
So when your headcount calls for a bigger Sales Team—don’t just assume quota will go through the roof.
Instead, focus on sales enablement.
Which is key to onboarding Sales Reps quickly and maximizing their selling skills.
Good for the company (higher revenue achievement).
And good for the new Sales Rep (more closed deals and higher commission payouts).
Challenge Your Business Partners
Every business partner you work with wants their teams to be fully funded with all ideas approved.
You can’t blame them—you would do the same thing if asked for staffing ideas and software initiatives.
The trick is to challenge your business partners.
Help them balance all the things with an approach that can actually work in practice.
For example, hiring is tough and usually takes longer than you think (plus don’t forget about attrition).
🔥TIP: Here’s how to calculate attrition in your headcount.
Understand what your company’s recruiting capacity is, and in turn help your business partners understand that limitation too.
Stack, rack, and rank priorities.
And many of the low-priority items will fall off.
Which helps your business partners focus.
Conclusion: Success Requires Preparation
In FP&A you can’t avoid the budget process.
But what you can avoid is being unprepared for it.
Start talking about goals, KPIs, and metrics now.
Your future you will appreciate it during budget crunch time 👍
How do you prep for your budget season?
Share your experiences by replying to this. We read and reply to every email.
Now go have fun making an impact on your business and your career!
See you next week 👊
Cheers,
Drew & Yarty
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Disclaimer: This content is not investment advice or financial advice. The views expressed and stories told are our own. We may be investors in the companies discussed. Do your due diligence when considering applying what you learn.
What Comes First: Targets or Budgets?