If you have to present a budget paper to your Board and/or investors it’s a good idea to provide a document explaining the numbers, rather than just hit them cold with a big complex spreadsheet.
It’s not just a better way to communicate with stakeholders but also a great way for you to clarify your planning.
There are no hard and fast rules but following the following format usually does a fine job.
First, do a one-page executive summary. It should give a high-level view of current performance, any major changes in anticipated circumstances, and proposed initiatives for the coming year. Add a table containing the top-level numbers over the past four or five years supported by a graph.
Next, provide a review of performance against last years’ budget. Split it into sections for; sales, the direct costs of providing services, customer acquisition costs (including sales and marketing staff salaries plus on-costs), administration costs (again include administration salaries and on-costs), R&D if you have it, and any capital expenditure. You should also note any cash flow related differences and the effect on the balance sheet. Use summary tables and graphs of major variances in each section.
Then, with the groundwork done, you can move on to the new budget.
Outline any proposed initiatives for the year, plus any material changes in circumstances, up front.
Then use the same sections you used for analysing last year but split out the new initiatives as a new column in your tables so it shows:
| Last Year | Proposed Budget | New Initiatives | Total 2018 Budget |
Finally, provide a summary of major cost increases and savings across the whole budget.
Then attach your spreadsheet that backs up the numbers.