Mike’s F9 Finance

Every finance professional should study sales. Even if you don't directly support business development and negotiations. You need to be constantly selling ideas. Constantly selling forecasts. Constantly selling yourself.

From the initial budgeting phase to ongoing financial oversight, finance professionals are key to resource forecasting and successful projects.

Collaborative Budgeting: Turning Ops into Budget Champions We all know that budget season can feel like a tug-of-war between finance and operations. While finance might hold the reins when it comes to process management, it's operations that ultimately steers the ship once the budget is set. So, how do we ensure that operations participates and takes genuine ownership of the budget? Let’s dive into some strategies that can make this collaboration seamless. Fostering Collaboration First and foremost, collaboration is key. This means inviting operations to the table early and often. By involving them in the initial stages of budgeting, you not only tap into their insights but also empower them to feel invested in the outcome. Encourage joint planning sessions where both finance and operations can align on expectations and objectives from the get-go. Clear Communication Communication is the bridge that connects these two departments. It's crucial to establish open lines of dialogue where both sides can voice their concerns and ideas. Regular updates and meetings can help keep everyone on the same page and reduce misunderstandings. Make sure that the language used in these communications is clear and free of jargon—this promotes transparency and understanding. Aligning Goals For operations to take ownership, they need to see how the budget aligns with their goals and the company's overall strategic objectives. Work with operations to identify key metrics and outcomes they are responsible for and ensure these are reflected in the budget. This alignment clarifies expectations and motivates operations to stick to the plan. Practical Tips for Building Strong Relationships Build Trust: Establish trust by demonstrating that finance is there to support, not just to dictate. Celebrate wins together and learn from any setbacks collaboratively. Provide Training: Offer workshops and training sessions that demystify the budgeting process for operations teams. The more they understand, the more likely they are to engage. Encourage Feedback: Create a culture where feedback is not only welcomed but actively sought. This shows operations that their input is valued and can lead to better budgeting outcomes. Acknowledge Contributions: Recognize the efforts and achievements of operations in the budgeting process. Acknowledgments can go a long way in fostering a sense of ownership. By focusing on collaboration, communication, and goal alignment, finance teams can transform the budgeting process from a battleground into a shared mission. When operations feel that they have a stake in the budget, they are more likely to engage deeply and drive toward success.

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The Budget Prioritization Matrix in Action When the coffers aren't overflowing, and every department believes their project deserves the lion's share, how do you decide who gets what? Enter the prioritization matrix—your go-to tool for making sense of the chaos. The Concept of the Prioritization Matrix Think of the prioritization matrix as your financial compass, guiding you through the stormy seas of budget season. This tool helps evaluate and rank projects based on impact, cost, urgency, and strategic alignment criteria. By visualizing these factors, you can objectively determine which projects should rise to the top and which might need to take a back seat. Setting Up Your Prioritization Matrix Define Your Criteria: Start by identifying what matters most to your organization. Are you focusing on strategic alignment, potential ROI, or perhaps the risk level? Choose criteria that reflect your corporate goals. Score Each Project: Gather your team and assign scores to each project based on your chosen criteria. This step ensures you're considering all angles and not just the most vocal advocates. Visualize the Matrix: Plot your projects on a grid, with axes representing your criteria. This visual representation will quickly highlight which projects offer the most value. Rank and Decide: Use the matrix to rank projects. Those in the top right quadrant—high impact and low cost—are typically your winners. On the flip side, projects in the low-impact, high-cost quadrant might need to be shelved. Practical Steps for Implementation Engage Stakeholders: Ensure all relevant voices are heard in the scoring process. This not only builds buy-in but also uncovers insights you might have missed. Review Regularly: Business environments change, and so should your matrix. Regular updates ensure it remains relevant and useful. Communicate Decisions: Clearly explain the rationale behind prioritization decisions to manage expectations and maintain transparency. Tips for Making Tough Decisions Be Transparent: Openly share how decisions were made to build trust. Stay Objective: Stick to the criteria, even when the pressure mounts to favor certain projects. Balance Needs: Consider both short-term wins and long-term gains to maintain a balanced portfolio. Leveraging a prioritization matrix can transform a contentious budget process into a structured and strategic exercise. This tool clarifies priorities and aligns spending with your organization's goals, ensuring every dollar is wisely invested.

Visualizing data helps turn a mountain of spreadsheet chaos into a clear, digestible story. Think of it as translating finance-speak into English.

Top-Down versus Bottoms-Up; Why Not Both? Welcome to the showdown of budgeting strategies: Top-Down versus Bottom-up. It’s the classic battle of control versus collaboration, big-picture versus detail-oriented. But what if I told you that the real magic happens when you combine the best of both worlds? Top-Down Budgeting: The Bird’s Eye View Let’s start with the top-down approach. Imagine you’re perched atop a skyscraper, looking out over your company landscape. This method starts with the big picture—executive leadership sets the strategic goals, and the budget trickles down through the ranks. It’s efficient and ensures alignment with overarching objectives. However, it can sometimes feel like a one-size-fits-all suit: great in theory, but not always the perfect fit on the ground. Bottoms-Up Budgeting: The Grassroots Effort On the other hand, we have the bottoms-up approach. This method involves getting into the trenches. Teams at the operational level build their budgets based on their specific needs and insights. It’s detailed and empowers departments, fostering ownership and accountability. Yet, it risks becoming a patchwork quilt of numbers that does not seamlessly align with the strategic vision from the top. Why Not Both? The Hybrid Approach Here’s where the magic happens: combining both approaches. By blending the strategic alignment of top-down with the detailed insights of bottoms-up, you create a budget that’s both aspirational and grounded in reality. Practical Tips for a Hybrid Approach: -Kick-Off with Strategic Goals: Begin your budgeting process by setting clear strategic objectives at the executive level. This provides a framework for everyone to align their efforts. -Empower Departments: Encourage departments to build their proposals based on their unique insights and needs. This ensures that the people closest to the operations have a voice. -Facilitate Ongoing Dialogue: Create a feedback loop between leadership and departments. Regular check-ins can bridge the gap between strategic goals and operational realities. -Balance Flexibility and Control: Allow departments to adjust based on real-time developmentsproposals based on while keeping the overall strategic goals in sight. -Integrate and Align: Use the insights gathered from the bottoms-up process to refine and adjust the top-down strategic goals, ensuring a cohesive and aligned budget. Adopting a hybrid approach gives you the best of both worlds: strategic alignment and operational practicality. So, next time you’re staring down the budgeting barrel, remember that you don’t have to pick sides. Embrace the complexity, and you might just find that a bit of collaboration goes a long way in crafting a budget that truly works.

Analysis without action is pointless. So I am sharing my framework to quickly turn financial data into actionable insights.

The worst-performing finance pros are a mess, constantly reacting to one fire after another. The best-performing finance pros have frameworks and structure and are planning key processes 2 to 3 months ahead. On the first work day of every month I review my team's project log as well as all of the upcoming processes, reporting deliverables, planning cycles, etc. I then map this out on my team's shared workflow, backing into all of the critical dates and when we need to start on each process.

Public speaking in finance? It's non-negotiable. Whomever you are speaking to, how you present financial data can make or break careers