You probably know by now. Your budget is broken. Busted. Kaput. Most companies had strategic goals approved and in place for 2020. And behind most strategic frameworks is/was a roadmap on how to pay for it – and it was called, a budget. That budget possibly included value drivers such as:
- Revenue improvement
- Risk mitigation
- People development
- Asset usage optimization
- Deploy a new technology via capital spending
- Improve liquidity
- Hire the best people
Face it. Your 2020 budget is probably long irrelevant at this point, and most stakeholders are painfully aware and impacted. From your sales levels and mix, to your A/R aging, to your inventory supply chain, and your workforce – how they work, how they interact and their safety, all impacted.
Let’s explore some key areas of budget inputs and assumptions that are likely acutely impacted, and why A) more than anything you need a fresh, scenario based 2020 Forecast and B) 2021 is probably an exercise in Zero Based Budgeting. Consider this is a lesson in the risk of static budgeting techniques, coupled with the need for the right budgeting software solution, platforms and or disciplines.
Capital Expenditures – You may be facing restrictions, guidelines, and constant disruptions if you are in an industry that is building or manufacturing (either for internal usage or external). You may be forced to stop mid steam capex projects, or delay, or face mate