When employees disengage from annual budget and forecasting

TORONTO – Happy New Year. For many of you Canadian accountants, especially if you work in the corporate sector, you’re about to enter your annual budget and forecasting season for the next fiscal year. We take on this duty every year because we know how critical a sound financial plan is to the efficient and effective management of company resources. 

Yet, despite its importance, many finance and accounting teams continue to experience disengagement and resistance from other departments that view the planning process as a nuisance or an inconvenience driven by the company’s “budget police.” 

It is this resistance that can lead you to feel frustration, tension or even anger towards those whose become an obstacle to the successful completion of the annual financial plan. 

The Perceived Problem

In preparing this article, I asked a small group of my former financial planning and analysis colleagues to share with me their perspectives on the source of the problem. I received a variety of responses, generally summarized as other departments:

1. Don’t care about the budget until they are told they can’t spend any more.
2. Think finance imposes budgets on them as a means of controlling them.
3. View budgets as “made up” rather than grounded in something real and tangible.

In short, they don’t “get it.” They don’t understand the relationship between a budget and cash resources. At the same time, finance staff say they are doing everything they can to aid their coworkers throughout their organization. The source of problem didn’t lie with them.

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Self-Reflection Before Blame

When a feeling of frustration results from the actions of another, it is easy to blame those perceived to be the source of the problem.

On the surface, the problem is that THEY didn’t submit their numbers on time. THEY didn’t follow the guidelines. THEY didn’t tie their budget into the company’s strategy. THEY need to change.

But here is the catch.

The only way to achieve the desired state where each department participates in the development of its own budget willingly and to the best of their ability is for finance and accounting staff to change their OWN actions and behaviour.

The Real Problem

When other departments are not abiding by communicated timelines, you don’t have a respect problem. You have an engagement problem.

When other departments are not taking the time to prepare a budget adequately, representing their needs, you don’t have an accuracy problem. You have an engagement problem.

When other departments are not planning within stated budget guidelines, you don’t have a compliance problem. You have an engagement problem.

But when other departments are actively engaged in the budget development process, they understand the value of their contribution and enthusiastically participate in the value creation process.

Remember, those who exhibit resistance do so because of how they perceive the planning process, its output, or how it will affect them and their job.

Get Ready to Build Engagement

Frustration, apathy and even anger are to be expected when employees see policies and processes as an imposition. Therefore, the question becomes: How can finance and accounting staff get other departments to understand the value of the planning process and to more actively participate in it?

In my next blog post, I will discuss three ways to build engagement with other departments, so that they fully participate in the budget and forecasting process. Because when all employees are pulling in the same direction, your organization will sail much faster to its destination.

Gavin Rouble MA, CPA, CMA, is an author, former CFO, and co-founder of The 2% Factor, pioneering an uncommon common sense approach to creating amazing workplace relationships. Gavin can be reached at gavin@the2percentfactor.com.