As most people head to the beach for their end of August summer vacation, I start to prepare my companies for their next annual budget.
If you’re a single entity startup this may sound early…but if you’re a multi-branch, multi-country entity you will need to consolidate each individual budget into a global budget.
As the CFO, I’ll work alongside the country managers and division heads at HQ to coach and help them produce their budget in a timely manner.
I will then consolidate these budgets into the company’s global budget and review all assumptions with the CEO, who must give the final nod of approval.
This process is orchestrated to meet the final deadline – the last board meeting of the year in December where the board of directors will approve or reject the budget.
Who decides the budget?
How could this impact you?
As the CFO, I have just decided how much money each country and division is allowed to spend next year. They are all constrained by their individual budget.
The C-suite, however, is not strictly constrained by a budget. They created it and have the authority to change it as they see fit, within certain boundaries of course.
If you’re an outside vendor would you want to work with individuals inside a company that are constrained by how much money they can spend?
Whatever stage you’re at in business, you need to be all over the numbers. In posts like this, we aim to offer bite-size food for thought – but in a few hundred words, we can only do so much.
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