The word “budget” should be a verb, not a noun, for professional marketing people. It is not simply a way of providing the finance department with an estimate of how much you think you’ll spend in the next year. It is a tool for understanding
Budget plan for cost analysis
This file [generic_budget_example_1] shows a budget plan developed to help plan and predict costs for a regional direct marketing program (details made “generic” for confidentiality). The attached PDF document was developed in Excel as a tool to plan for the next year’s budget requirements.
- Page 1 shows an overview of the plan, including the plan for the current year (1999), the projected outlook for the current year, and the plan in progress for the next year (2000)
- Pages 2-6 show the detailed cost projections of each natural account grouping; collateral distribution, collateral printing, merchandising and on-hold production, and direct mail bill-inserts and stand-alone costs.
- Page 7, “Variables,” was an innovation I developed in order to help facilitate “what if” scenarios proposed by management. Rather than have actual data for projected or estimated quantities (new customers, printing costs, postage costs, etc) appear in the appropriate account area, all variables were grouped on this worksheet for ease of adjustment. This enabled easy changes to key data to be made as different scenarios were plugged into the overall budget. For example, if management requested an overall reduction in bill insert costs, changes could be made to either the print cost (which would require a less-expensive design), or to the percentage or customers included in the mailing.
Budget plan for monthly tracking
This plan [generic_budget_example_2] was developed in order to facilitate monthly tracking of expenses against plan for all natural account groupings within a regional marketing communications budget (details made generic for confidentiality).
- Page 1 shows the overview of the plan for the year with breakouts of the straight-line budget-to-date, variance to straight-line, outlook and variance-to-outlook. The monthly totals below shows monthly expenses or plan by account; months with actuals posted to the GL are shown in green, months with projections only are shown in blue.
- Page 2 shows the planned media mix by dollars for the year.
- Pages 3 and 4 show tracking by account group for months (January and February) with actuals posted to the GL.
- Page 5 shows a month (March) with projections only. As financial results are posted to the GL, months were switched from projections to actuals.
Integrated budget plan
This last plan [generic_budget_example_3] shows a budget that incorporates elements of expense planning and monthly tracking into one document (details made generic for confidentiality). This format allows for:
- Shifting of purchases from month to month as changes take place
- Easy identification of outlying and/or unplanned expenses
- Accurate planning of next year’s plan from actual GL verified expenses
- View of expenses by natural account, geographic region and month
- Real-time projections of final expenses and variance
Since the same document is used for planning and tracking, all individuals involved in the budget process (management, accounting, line-level employees) can look at the same “picture” of marketing spending without translation of key data from one format to another.
- Page 1 shows a “to date” overview with details of the submitted plan, approved plan, actuals to date, budget plan to date, variance to date, and year end projection and variance. Hidden columns show final budgets and actuals for previous years.
- Pages 2 and 3 show the “planning” pages of the worksheet for one account group (advertising). Planned expenses are shown by month and region/market. Planned spending is indicated with purple text in order to easily discriminate it from actuals, which are colored black (below).
- Pages 4 and 5 show the “actuals” pages of the worksheet for the advertising account. By keeping GL matched actual expenses (text in black) on the same worksheet with the plan, management can easily spot discrepancies. Note: all cells with “desc txt” are placeholders only.