Friday, July 9, 2010

It's Budget Time

I must be getting old. Because when I was cutting my teeth as a frontline operator, part of my job was to produce a balanced operating budget and then perform to it. The CEO doled out the expectation of 'balanced' (and whatever that meant) and we the operators got to work figuring it out.

Today, I hear more and more from both CEO's and front line folks that the CFO is writing and balancing the budget. Hmm. How'd that happen?

I don't know. But I'm here to get out my soapbox and stand on it.

The CFO's job is to report what has happened. And, to forecast what will happen if the present course is kept or the proposed course of action is taken. That's it.

The writing of a budget is a financial expression of a plan. The responsibility for the plan is between the CEO and the people responsible for generating the resources to execute the plan. And, that's not the CFO. If it is in your organization, than your CFO is really the COO and has lost the objectivity required of a good CFO function. I'd like to see the CFO take a vacation for the two weeks that a balanced operating plan is being developed.

Okay. I feel better. Now, all you CEO's and Frontline Operators... go write your own plans and budgets!

Good questions here...
  • "Whose job is it and why?"
  • "Whose decision is it?"
  • "What principles will guide our decision?"