Lean Budgeting Techniques

𝗟𝗲𝘁'𝘀 𝘁𝗮𝗹𝗸 𝗰𝗼𝘀𝘁𝘀 𝘁𝗼𝗱𝗮𝘆... ...because if you're in FP&A, you've definitely sat in one of those meetings… “Guys… we need to cut costs.” Everyone goes silent and all heads swivel to finance. lol. And then you instinctively open Excel to look busy 😩 A while back, a company I worked with decided to launch a "cost reduction sprint." The goal? Shave ₦100M off the P&L in 60 days. The first move? Freeze team lunches, and slash staff welfare. But guess what was untouched? >> A ₦40M/month logistics arrangement that hadn’t been renegotiated in 18 months. >> A bloated software stack with 10+ overlapping tools. Yes, costs came down. But so did morale, productivity, and eventually, revenue. Don't be like that. Let me show you how to approach cost reviews smartly: 1. Start with the big buckets: Don't waste energy arguing over lunch budgets. Zoom out. Where are the real levers? Usually, 3–5 cost lines move the needle: logistics, payroll, marketing, operations. Focus there first. It’s where meaningful efficiency lives. 2. Break down into fixed vs. variable costs and review performance: >> Fixed costs (rent, salaries) require structural decisions: renegotiation, process reengineering, automation, etc. >> Variable costs (shipping, commissions, raw materials) give more flexibility for short-term gains. Plot costs vs. revenue: do they scale appropriately? 3. Do a zero-based review (where needed): Zero-based budgeting isn’t just for budgets. Ask: “If we had to build this cost line from scratch, would we spend this much? Why?”. It's tough work but worthwhile, and especially useful for subscriptions & software, marketing expenses, consulting and third party vendors. 4. Evaluate vendor spend: Vendor lines hide shocking amounts of inefficiency. I once found a team paying 3x market rate for routine services because “we’ve always used them.” Ruthlessly benchmark rates. Consolidate where possible. Kill redundancy. 5. Headcount & Payroll: Headcount is usually the biggest cost but it’s not the first to attack. Before suggesting layoffs: >>Fix team structure >> Eliminate manual tasks >> Automate where possible >> Cross-train before hiring Layoffs are sometimes necessary, but they should never be the default. 6. Introduce procurement & expense discipline: This doesn’t mean burying everyone in red tape. Just ensure spending decisions are intentional. Clear approval flows. Visibility. Pre-approvals for big ticket items. 7. Simulate cost impact scenarios: “What happens if we cut travel by 40%?” “What if we renegotiate rent in 3 locations?” Data wins debates. Always model before recommending. 8. Tie every cost to a business goal. For every cost line, ask: “What outcome are we driving with this?” No clear answer? That’s a red flag. Recommend a reduction or a reallocation. Bottom line: Cutting costs is reactive. Optimizing costs is strategic. The real win in FP&A is helping the business do more with less, without ruining the system. #FPATuesday

4 Ways to Cut IT Costs (Without Derailing Progress) Because budget cuts don’t have to mean broken tools, burnt-out staff, or saying goodbye to innovation. Most cost-cutting plans feel like a panic attack in PowerPoint form. But it doesn’t have to be that way. Here’s how smart IT leaders reduce spend—and increase impact—without setting the place on fire: 1. Find Hidden Cost Traps The biggest leaks aren’t obvious. They’re subtle, routine, and quietly expensive. Too Many Tools ↳ Map all tools to their actual job. If three platforms are all "collaboration tools," it's time to consolidate. Manual Workloads ↳ Automate anything repetitive. Approvals, resets, new user setups—if it happens more than twice a week, it's costing too much. Untracked Assets ↳ Use dashboards to track usage, not just possession. If it’s unused, it’s wasting money. Always Reactive ↳ Stop solving the same fire twice. Every incident should include a review. Fix the root, not just the result. Shadow IT ↳ Rogue tools happen when people don't trust the process. Bring them in, don’t crack down. 2. Make Smart IT Moves Cutting costs doesn’t mean cutting capability. Platform Consolidation ↳ Run fewer systems, better. Centralize requests, assets, and approvals on one scalable ITSM platform. Automation First ↳ Identify 3 tasks your team dreads. Automate those first. That’s ROI with receipts. Asset Visibility ↳ Track what you have, who’s using it, and when it renews. Surprise renewals = surprise budget crises. Shift Left ↳ Move common fixes down the stack. Help frontline teams solve problems faster and free up your experts. 3. Lean Your ITSM Stack Fewer tools. Cleaner workflows. More room to think. Visibility ↳ Build reports that connect tools to outcomes. If you can’t measure value, it’s probably costing you. Efficiency ↳ Automate high-volume, low-thinking tasks. Focus your people on what requires judgment—not clicking boxes. Optimization ↳ Eliminate what’s unused or unloved. There’s no budget line for “we might use this someday.” Strategy ↳ Reinvest the savings. Don’t just slash—build. 4. Use the 4-Month Fix Plan Big wins don’t require big rollouts. Just a focused sprint. Month 1 – Take Inventory ↳ List every app, license, and system. No spin. Just get the facts. Month 2 – Cut Redundancy ↳ Merge what overlaps. Kill what doesn’t serve. Call your vendors. Month 3 – Automate Tasks ↳ Fix the annoying stuff. Automate it. Free up your team for better work. Month 4 – Realign Budget ↳ Apply recovered funds to high-impact projects. Show results in business terms, not ticket volume. Cutting costs doesn’t mean cutting effectiveness. With the right strategy, your team can spend less and deliver more. What’s one cost-saving move your team made that actually worked? ♻️ Repost if you believe IT can be efficient and excellent. 🔔 Follow Bob Roark for IT strategies that reduce chaos, not just budget lines.

🎯 "If I do budgeting the same way again next year, fire me." After almost half a dozen roundtables with finance and CFOs, I collected some spicy takeaways to help you budget better without losing your sanity—or your weekends: 💡 Don't make the the budget into a single, "big bang" event Multi-year outlooks and long range plans -> detailed annual plans -> frequent rolling forecasts to create a continuous planning cycle. 🔄 Trigger-Based Budgeting Why re-budget everything every year? Set triggers based on whether your assumptions have changed. If nothing changes, neither should your outlook. One company cut effort by 20% annually using this method. 📊 Driver-Based Models FTW Orient your models around P&L, balance sheet, and cash flow drivers. 📐 Top-Down vs. Bottom-Up: The W Dance Most orgs do a “W” negotiation—budget goes up, comes down, goes up again. Some are skipping the negotiations and just maintaining YOY goals; others warn about unrealistic top-down targets can crush morale faster than a surprise audit. 🤝 Finance ≠ Budget Police Finance facilitates, not dictates. Ownership belongs with the business units. Your job is to control the money, not the people. 🧠 Risk Management = Cone of Uncertainty Stress test assumptions, visualize upside/downside, and embrace scenario planning. Because reality doesn’t care about your spreadsheet. 📣 Final Mantra “Change is not a threat to the plan—it’s part of the planning process.” Discipline in the process. Agility in the execution. 💬 What budgeting practice has saved your team the most time or pain? Drop it in the comments—let’s build a smarter FP&A community together. #FPAC #Budgeting #FinancialPlanning #FPAAC #FinanceHumor #CorporateFinance #AFP2025 #AgileFinance #BryanLapidus #FP&A #Leadership #CareerGrowth

Most SMBs build budgets based on last year’s numbers. But that’s how waste creeps in. Here’s how to use Zero-Based Budgeting to cut the fat and boost profitability (even if you’ve never done it before): What is Zero-Based Budgeting? Unlike traditional budgeting, you start from 0. Every expense must justify its existence. Every dollar fights for its place. Your money is fully allocated. Income - Expenses = $0. Everything has a purpose. Why use it for your SMB? It forces you to: • Eliminate waste • Get lean and efficient • Make profit-based decisions Here's how you do it: Step 1: List every activity in your business. Start with what your business does: • Fulfill customer orders • Run paid ads • Handle support tickets • Do bookkeeping Each activity costs money. Write them all down. Step 2: Assign costs to each activity. For each one, ask: • What does this cost us per month? • Who is involved? • What tools or platforms do we use? Add it all up. This is your baseline activity cost. Step 3: Ask “Is this necessary?” for everything. Go line by line: • Is this expense mission-critical? • Is there a cheaper way to get the same result? • Can this be paused or removed? Cut or reduce what doesn’t directly drive ROI. Step 4: Rebuild your budget from the ground up. Start at $0. Then add back in only the expenses that: • Drive results • Support your goals • You can fully justify This gives you a clean, lean budget with zero fluff. Step 5: Repeat. Do this every 6-12 months Markets change. Tools evolve. Businesses pivot. Revisit your budget regularly and keep asking: “Would I still approve this expense if I had to start from zero?” Zero-based budgeting = Better decisions, tighter cash flow, higher profit. — Want to implement zero-based budgeting properly? Send me a DM.

It’s that time of the year.. (and no, not Halloween) Budget season. Q4 hits and suddenly everyone’s talking about “next year’s targets”, yet very few companies are truly budgeting for growth. Here’s the pattern I see every single year with Series A+ companies: - Revenue targets are set top-down - Budgets are built in isolation from actual performance levers - Everything looks good in a spreadsheet - Then Q1 misses happen, again So, how do you break that cycle? 1. Start with revenue, not costs Too many teams begin budgeting by looking at expenses. But the question should be: “What’s the revenue goal, and what has to be true to get there?” Then work backwards. - What’s our current pipeline and conversion? - How much new business needs to come in? - What marketing or sales motions do we need to double down on? - Are there operational constraints we’re ignoring? 2. Budget around business models, not departments Traditional line-item budgets silo spend into departments, and miss the point. Instead, identify revenue-generating engines in your business and build models around them. Example: → If customer success drives expansion, treat it as a revenue lever, not a cost center. 3. Use scenarios, not static forecasts The reality: next year won’t go exactly to plan. So why create a single plan? Build 3 models: - Base case (conservative growth, realistic costs) - Stretch case (ambitious but backed by clear bets) - Downside (what breaks if key assumptions fail?) This gives you agility, not just accountability. 4. Make your budget operational Most budgets live in Excel and die in silence. The real value is turning your budget into: - A monthly operating rhythm - A shared dashboard your team actually uses - A decision-making filter, what do we cut vs double down on? You don’t scale by budgeting harder. You scale by budgeting smarter, grounded in what’s working, what’s not, and what you’re actually willing to bet on. It’s about creating clarity now, so you’re not stuck course-correcting in Q1. PS: I break down topics like this weekly in my newsletter. Sign up here: https://lnkd.in/ej3GB8dc