The Budget Purgatory - Part I

The budget journey: hell, purgatory, paradise

We emerged from the pit and sailed toward the shore where the sun started to rise on Mount Purgatory. The foul smells of the budget were dissipating and the smell of spring rain shower permeated the air. We made land where an old man looked quite shocked at the method of our arrival. My guide explained that I had not been damned to the Inferno, but was only been given a tour of the region in order to save myself and others.

The old man told me that the souls I was about to meet were not being punished but were being purged of their mistakes, perfecting their financial plan and readied for Paradise. I would meet two types of souls in the Budget Purgatory: the ones who could not get their models to work right, and the others had ideas that were not accepted by the budget lords.

We walked on towards the mountain. The mountain climbs out of nothing and soars with a sheer face that looked impossible to scale. My guide told me it was known as “zero base.” Many have tried to build the budget from zero only to be told to start from the higher ground of the “Actuals”. However, building a mountain based on “padded” or “spend it if you got it” numbers usually causes an avalanche.

There was a man about 50 feet up the face. I spoke to him and asked him if he could offer any advice on where to grab a hold. He turned and I immediately recognized his face. It was my first budget director. I was surprised to see him and he could see this by the look on my face. “True my sins were great, but I had a change of heart right before my retirement. I learned that annualization was not the way to predict next year’s revenue. My fate is to climb this face for 7 times the years I annualized. Learn as I did and start with trending to estimate the future.”
I bade him adieu and went on.

The next elevation was a steep rocky trajectory. A number of people were sitting around on some of the larger boulders. They appeared to be lazy and I wondered what they were doing. I asked one why he was not moving towards the summit. He responded that it was his intent to use Key Performance Indicators to forecast, but his company could not determine which indicators were key. Every division thought that everything they did was key to the operation. All the keys became so granular that the project died. Now he was here to work it out.

At the top of this route there was a chasm with the next ledge some 50 meters up and 100 meters out. There were cables crossing the gorge with men working on either side. I asked my guide what was happening. He explained that the revenue models and expense models were not connected. Increases in revenues did not trigger a corresponding increase in budgeted expenses. Now they were building a bridge to connect the expense to the revenue.

Magically we appeared at the next ascent. There looked to be multiple ways up: one of ice, one through a dark forest and another up a raging river. There were souls attempting each. I yelled out questioning why there were three choices here. I heard a voice yelling back to me from inside the forest. It told me that the courses represent different vendors. “My business had multiple major contracts. I could not model revenue according to the terms. The sales projections were good, but net revenue was off. I must ascend each until I am an expert at every one.”

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Tagetik for unified budgeting, planning and forecasting

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