Opportunity Assessment Initiative Name
Show Me The Return…
Director, Corporate Security
The evolving security professional…
Does your department strategy align with your company’s?
‘…expense reductions and productivity improvements over the next two years…’
Michael T. Duke, Walmart President and CEO
‘We have the clear opportunity to double the business in the next five years.’
Leslie H. Wexner, Limited Chairman and CEO
The Learning Curve
Requests & Approvals
Delegated portion of the budget
Managing a function’s budget
Finance Key Terms
Budget – the approved spending plan
Forecast – latest estimate of expenses
P&L – Profit and Loss statement, i.e. income statement
Balance Sheet – Financial statement containing assets and liabilities, e.g. accruals
GL Account - General Ledger account that classifies a financial entry e.g. travel, repairs, etc.
Accrual – Finance entry in GL system to reflect expenses when incurred (actual payment
timing could differ)
COA String – Chart of accounts string consisting of segments that represent a specific
department value in the GL
Types of Spend
Payroll and Benefits
Training and Development: In-house Training, Outside Training
Travel and Entertainment: Airfare, Car Rental, Non-Travel Meals, Entertainment, Travel Per
Diem (Hotel, Meals, etc.)
Leased Auto: i.e. Runzheimer fees
Other Operating Expense: Network Expense, Hardware Equipment Expense
Administrative: Supplies, Printing, Consulting fees
Understand the Process
Leverage – business partners
purchase orders initiation
Payment – net terms
Building a Budget
If you can, build a bottom’s up budget. It is much easier to manage during the year because the numbers make sense and it
is easier to update your forecast.
Analyze past spend & trends (3 years – baseline)
fixed vs. variable costs
Are there opportunities or risks?
reallocate, cut, or add
How are you sourcing?
Each line item – really analyze it
Are you lining up with your strategic goals for the year and long range? Any adjustments to be made?
After the many iterations – finalize your plan! Commit & Communicate!
Six Tips For Budget Management By Gene Siciliano, CMC, CPA, author, speaker, financial consultant
1. Look at the budget before you commit funds.
2. Negotiate pricing with your vendors.
3. Made trade-offs.
4. If revenue doesn’t develop as planned, plan to under-spend accordingly. Ultimately, the budget is
about the bottom line.
5. Timing is not trivial—don’t spend ahead of schedule.
6. “Oops!” is not a good explanation for overspending.
REPITITION IS KEY: Review, review, review
Keep to a weekly, monthly, and quarterly review habit
Forecasting is about Full year updates…not just monthly updates
Estimating Costs: If you do not know actual costs of a future trip or project, estimate spend
based on history or use budget template
Incorporate all costs, e.g. taxes, shipping, etc.
Timing of spend should be reflected when services are rendered or purchases made
Keep your team accountable!
Finance Best Practices
Always question the details – Once costs are rolled up at the highest level, it is easy to lose sight of the smaller
details. There is a saying “the devil is in the details”.
Always be prepared to answer questions about historical trends and irregular activity. Keep a log with you for the year on
random charges, document it and file it away.
Pay attention to un-forecasted/un-budgeted activity occurring today and plan to budget for it next year.
It is good to review costs as a percent of something (% of cost sales) or $/SQFT. This way it is easy to recognize large
variances and flag where your research efforts should go.
Question suspicious activity
When looking at monthly trends, it is best to have at least 13 months of activity because seasonality plays a big part in
Common metrics to look at each month are current period vs. prior, Year to Date vs. prior, Total year vs. LY, actual vs.
forecast, actual vs. budget, forecast vs. budget.
Always print out your final forecast so in case you need to make changes, you have a hard copy to reference and confirm the
update was accurately posted.
More Tips & Traps
Use the calendar – fiscal, outlook, etc.
More Tips & Traps
Review your reports - highlight things in red (worse) or green (better)
More Tips & Traps
Project Plans & Timing
Check In with your team….never assume!