10 Best practices in Planning and Budgeting

10 Best practices in Planning and Budgeting

An organization can’t survive without a successful Planning and Budgeting process. In this blog we focus on best practices that will enhance your Planning and Budgeting process. This way you can make more informed decisions and add value to your organization. Let’s take a look at our 10 best practices for your Planning and Budgeting: 

Budgeting as part of the corporate culture (accountability)

Budgeting should be adopted as part of the corporate culture and be treated as a strategic management tool instead of a mere financial tool. It should be an exercise where senior management sets realistic targets. Department managers are required to produce their own plans and tie incentive compensations to their ability to manage their business and achieve their goals.

Collaborative planning

Budgeting should be a collaborative activity across the various functional departments similar to any other real-time activity where every department coordinates with each other seamlessly to run the business operation.

Synchronization of the strategic and operating plans

Both the strategic and operating plans have to be synchronized and related to ensure that the line managers work towards the same goal, set out by the top management.

Driver based planning

The planning exercise is all about assumptions. As the exercise is futuristic, the models are created with assumptions that the top management or the line of business managers perceive to achieve the goals. Drivers are nothing but the pillars based on which assumptions are determined. So from a best practice standpoint, it is very important to build a template or planning model that covers all the drivers.

Both Bottom up and Top down 

To avoid any unrealistic results derived from the extensive use of either bottom up or top down approach, budgeting done with both scenarios and finally the bottom up plan should be tied to the top down (target) plan, marrying them together.

Budget material content only

Maximum budgeting time should be spent on areas that would have significant impact from a revenue, cost or profits. Aiming at this, there should be a reasonable reduction to the planning depth.

Timely and accurate Budgeting and Planning 

Budgeting exercise should be carried out in a specific timeframe to ensure it is relevant. The accuracy is also another aspect. Especially for the higher impact elements, it is important that the numbers are accurate. When building a driver based model, the calculations that result from the drivers should be accurately modeled to get the right results.

Adaptable and continuous planning using rolling forecasts 

Every plan becomes successful only when it is flexible to change based on the internal and external events and incorporating their impact. Best practices recommend rolling forecasts coupled with annual planning, to ensure the business plans reflect the latest scenarios.

Use of standardized planning and simulation software tools 

Planning and Forecasting activities should be combined within a single system that will allow centralized data capture and analysis, as well as modeling, simulation and online analytical processing (OLAP) on a single technological platform.

Standardization of the planning, budgeting and forecasting process 

To ensure the simplification and unification of the ratio and key data definitions on Group level, the budgeting tasks should be performed using a consistent planning model for all business units.


Your Planning and Budgeting process can cause a lot of stress and frustration. With these best practices in mind, you can optimize your Planning and Budgeting process tailored to your business needs. Save time and make more informed decisions! 

Do you have question or need more information? Aexis is an expert in Corporate Performance Planning and can help your organization with Planning and Budgeting. Our expert Christian Pauwels is happy to help you with this! Contact Christian for more information. 

Want to start with defining your Operational Planning? Then we recommend to read our previous blog 5 basic principles of Operational planning

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