United States

Budgeting groundwork


Excerpted from the July/August edition of Private Club Advisor (July 16, 2016)

Before asking department managers to come up with budgeting numbers for the coming year, how about requiring each manager to create a basic business plan for his or her department to serve as the foundation of the budget.  The financial consulting firm, RSM US LLP (formerly McGladrey), has seen this approach work successfully.  Each business plan would include the following:

  • A mission statement to define what the department does and how it plans to develop further
  • Goals and objectives (a minimum of two or three) for the coming year to help the department achieve its mission
  • Action steps showing how the department will accomplish the goals

“We feel as though the business plan would help department managers define a direction for their respective departments before getting into the budgeting numbers,” Phil Newman of RSM US said.  “The business plan also improves transparency with the finance committee and the board of directors by articulating what each department is trying to accomplish.  The plan creates more accountability with management.”