It's budget time, and you're ready! Painstaking detail and effort have gone into making sure that all 300+ pages of the budget book have been checked and rechecked. While this may feel like a job well done, the hard part (communicating) is just beginning.
The reality is that a budget without context is just as ineffective as a map without a legend. The presentation of the budget's information is your chance to help Council, the Board, or any other stakeholders map out where your organization is today and its future direction (remember the map)!
With lots of information to share in a limited time, effective communication is essential. Therefore, when developing your strategy, you should consider the objectives of:
- Informing, and
Informing is the starting point for communication and is based on the following:
- Information flow is in one direction
Reading a budget book is an example of the one-way flow of information. The reader receives the information. However, without any accompanying conversation, they do not have the opportunity to ask questions or give feedback.
Further, just providing the information is not enough. Communicating with the goal to enable understanding helps Council focus on and interpret the data so that the intended messages are received.
Simple strategies for improving comprehension include using:
- Progressive disclosure to keep things focused
Progressive disclosure keeps information at the summary level until the reader asks for or needs more detail. Providing too much information at once is overwhelming, causing that glazed-over-eyes phenomenon we have all seen!
Learning efficiency benefits greatly from the use of progressive disclosure. Information presented to a person who is not interested or ready to process it is effectively noise. Information that is gradually or progressively disclosed to a learner as they need or request it is better processed and perceived as more relevant.
Universal Principles of Design,
Lidwell, Holden, Butler
Using a drill-down approach provides additional information as necessary when the readers are ready to make sense of it.
- Style for understanding
When it comes to style, remember that beauty is in the eye of the beholder. Thus, the focus should not be on what looks pretty but on understandability. To convey the message, consideration should be given to using the right combination of text, tables, and graphs. Find more information on this topic in our 3 questions to answer before report design blog.
Engaging provides Council with the opportunity to receive information as well as respond with questions. The benefits of this multi-directional approach become apparent as heads begin nodding with understanding instead of the usual nodding off.
While the Council presentation and budget deliberations themselves are forms of engagement, tools such as real time-modeling can make things even more dynamic. If a picture is worth a thousand words, a simulation is worth at least a million. Simulations can help demonstrate individual budget components, their relationship with other areas, and the impacts of making changes that are often hard to articulate.
Specifically, a simulation can:
- Demonstrate the inherent trade-offs that come with competing resources and desires
- Highlight the differences between discretionary and non-discretionary items and how they impact the budget
- Show both the short- and long-term impacts of budgetary changes
Shifting your Role:
It is no secret that finance and budget departments' resources are limited, and much of those resources are already allocated to just preparing the budget. This begs the question of how to implement these strategies? If you are familiar with our work, you may have already guessed the answer: Best Practices paired with the appropriate Technologies.
There are various software solutions that can free up staff resources by:
- Soliciting community engagement and integrating it into the budget
- Automating the preparation of the budget publication
- Assisting with a real-time, interactive presentation
Budget simulators are one such tool you can consider. Read more on their utilization for engaging stakeholders.
Using technology to reduce the more manual and mechanical processes, you can shift staff resources to focus on better communication and engagement. This allows finance departments to add value as not just number crunchers but as trusted advisors.