Planning is a core activity in every organization. Yet, when annual budgeting season arrives, frustration often follows. Many finance and business leaders see budgeting as slow, painful, and ultimately disconnected from reality. This frustration is not without reason. Traditional budgeting has long been a labor-intensive process that consumes time and energy while delivering limited value.

Common challenges include:

  • Manual workflows, with Excel files passed back and forth
  • Disconnected data, leading to debates over which numbers are “correct”
  • Budget gaming, where targets are padded to protect bonuses
  • Limited transparency, as Finance builds plans in isolation
  • Multiple versions of the truth, constantly changing at leadership level
  • Obsolete results, with budgets outdated before they are finalized

Despite these issues, budgeting remains unavoidable. The real question is not whether companies should plan, but how they should plan in a way that reflects today’s business reality.

Why change is no longer optional

Many organizations have already taken steps to modernize budgeting and forecasting. Still, most are far from achieving a truly connected and dynamic planning process.

The COVID-19 pandemic exposed this gap more clearly than ever. Overnight, carefully prepared budgets became irrelevant. Finance teams were forced to build multiple scenarios, reassess cash flow daily, and respond to rapid changes with limited tools. For many FP&A teams, this was a wake-up call.

A modern planning approach is essential because it enables:

Agility and responsiveness: Static annual budgets lock organizations into assumptions that are rarely held. Continuous, connected planning allows companies to adapt as conditions change.

Cross-functional alignment: Effective planning is fundamentally about communication. Without strong collaboration between Finance and the business, even the most detailed budget will fail.

Data-driven decision-making: Decisions based on outdated or incomplete data undermine confidence. Real-time visibility into key drivers allows leaders to course-correct throughout the year.

Smarter resource allocation: Connected planning helps leadership shift resources to where they create the most value without being constrained by last year’s assumptions.

Common pitfalls that undermine budgeting

Before improving the process, it’s important to understand where budgeting typically breaks down. Most issues fall into three categories.

1. Communication gaps

If stakeholders do not understand the process, assumptions, and outcomes, alignment breaks down. Few things damage trust faster than hearing, “That’s not my number.”

2. Lack of collaboration

Budgeting is a planning exercise. The goal is not to predict the future perfectly, but to create a credible plan that guides decision-making. This requires collaboration across functions to align operational priorities with financial goals.

3. Data quality issues

Even the best planning process fails if it is built on poor data. Misinterpreted, incomplete, or incorrect data can lead to costly mistakes. Recognizing data quality as a risk allows teams to introduce additional validation and business reviews early.

Quick wins to improve the budgeting process

While long-term transformation takes time, several improvements can be implemented immediately, regardless of tools or technology.

Align targets early: Ensure senior management and FP&A agree on high-level objectives before the process starts. This avoids rework and misalignment later.

Build a realistic calendar: A detailed timeline with clear deadlines, ownership, and buffers keeps the process on track and reduces last-minute surprises.

Simplify templates: Templates should support understanding and collaboration, not overwhelm the business. Focus on what truly matters and forecast immaterial items centrally.

Focus on key drivers: Most businesses are driven by a small number of critical variables. Prioritize accuracy and quality where it has the greatest impact.

Run a post-budget review: After each cycle, capture lessons learned and define concrete actions to improve the next planning round.

The long-term vision: people, process, and platform

Best-in-class FP&A planning requires a clear long-term vision, supported by three pillars.

People: Do teams have the right skills to support advanced planning, forecasting, and analytics? If not, this gap must be addressed through training, hiring, or technology.

Process: End-to-end planning processes should be clearly defined, continuously improved, and embedded into how the organization operates.

Platform: Outdated tools limit even the strongest teams. A modern planning platform must support connected data, scenario modeling, and collaboration across the business.

Summary

Budgeting does not have to be a painful annual ritual. When approached as a connected, continuous planning process, it becomes a powerful tool for alignment and decision-making.

By applying practical quick wins today – while building toward a modern FP&A planning vision – organizations can finally move from chaos to clarity.

(source: https://www.jedox.com/en/blog/planning-budgeting-season/)