If you are part of the Supply area, you have surely experienced a period of stress due to closing the annual budget.

Although the Financial area anticipates the mail every year or sends informative alerts and although it has been defined in the schedule that October 31 is the closing date, the reality is that this year does not really close until the third week of November .

The desire of all areas is to be able to include as much as possible, the “letter to the child god” that finally the finance area begins to cut initially in democratic exercises and in the final stretch in decision-making committees where what was considered is simply reported.

Schedule for meeting goals

This budget remains rigid during the execution of the year and in the best of cases with monthly budget controls that are sent to the areas with compliance indicators.

Before each purchase or expense request, what was considered in the budget must be explained to the approving area in order to continue with the processes.

This exercise is quite exhausting and generates certain barriers between officials and there is a certain lack of interest in reviewing budgets.

Stages of budget control

Budget control finally starts from a business culture and cannot be a short-term exercise that affects the organization; on the contrary, it must be a structural process that must permeate all collaborators, keeping in mind the achievement of the defined strategic goals.

Below are some suggestions for good practices to make the budget exercise organic and constant throughout the year, making the budget a dynamic and participatory task:

As an important aspect in budget control, a pool of unforeseen events must always be considered, whose governance is based on the materialization of the risk matrix, in whose management there must be plans that allow for its proper management and impact, after the sensitivity analysis. Of all the budgeted scenarios, they must be budgeted month by month and reviewed in each financial year (PT).

Finally, the margins must be maintained with respect to what is estimated in the Annual Plan and each budget review in each quarter (PT) must maintain the target margin by adding the actual value plus what is budgeted for the remainder of the year, according to the corresponding month. . This methodology will make the budget exercise a dynamic and constant activity that implies commitment and review of those involved.