budget-planninglisted

# Budget Planning ## Annual Budget Process ### Timeline (Reverse Calendar) | Date | Milestone | |------|-----------| | Oct 1 | CFO issues budget guidelines and macro assumptions | | Oct 15 | Department heads submit headcount plans | | Oct 31 | Department heads submit expense budgets | | Nov 15 | Finance consolidates, identifies gaps vs. plan | | Nov 30 | Executive review and negotiation | | Dec 15 | Board approval | | Jan 1 | Budget locked — new fiscal year begins | ### Macro Assumptions to Align Early - Revenue growth target (top-down or bottoms-up) - Headcount growth % by function - Inflation assumption for salary increases - Capital markets / fundraising assumptions - Key risk scenarios: bull / base / bear case --- ## Budget Approaches ### Top-Down - Executive sets targets → departments fill in how to achieve - Fast, aligned to strategic priorities - Risk: unrealistic targets disconnected from operational reality ### Bottoms-Up - Departments build from detailed plans → consolidate to company total - More accurate, builds ownership - Risk: empire building, everyone asks for more than needed ### Zero-Based Budgeting (ZBB) Every line item must be justified from zero — prior year spend provides no entitlement. **ZBB Process:** 1. List all activities performed by the team 2. For each activity: what is the output? What does it cost to deliver? 3. Rank activities by strategic value 4. Allocate budget from highest to lowest priority until budget cap is hit 5. Document wha