How to Make Your Financial Budgets Work for You

How to make your financial budgets useful

Insight from Secret CFO 

Budgets have no relevance in their own right.

Think of your budget as a backstage pass—it gets you in, but the real action happens on stage.

To create real action, we must perform a monthly performance review.

You want to ensure that this monthly rigor gets replicated at each level within the team.

The tighter the process, the more control over performance.

Here is a summary of the 11 key principles for running effective financial performance reviews:

1. Monthly Cycle: Monthly reviews provide a robust view of financial performance.

2. Right Timing: Reviews should be held 3-5 days after management accounts are published.

3. Mandatory Attendance: Schedule meetings well in advance to avoid absences.

4. Pre-Meeting Tension: Set the tone for the meeting with a clear message once monthly results are published.

5. Appropriate Materials: Ensure materials for the meeting are well-prepared and structured.

6. Right Attendees: Include key roles such as Chair, Agitator, Performance Owner, Truthmeister, Contributors, and Secretary.

7. Balance of Challenge and Support: Manage the meeting effectively to surface issues and find solutions.

8. Root Cause Analysis: Understand the true drivers of variances in performance.

9. Action Plan Agreement: Define actions clearly with ownership and deadlines, avoiding vague strategic ideas.

10. Post-Meeting Follow-Up: Circulate actions by email and reinforce key messages.

11. Zero Tolerance on Broken Commitments: Hold people accountable for their responsibilities