Budgets vs. Targets
Financial monitoring is an essential function to assist in making informed business decisions. Do you utilize budgets, or targets? Our thoughts…
Budgets - Budgets place restrictions on financial transactions. The mentality associated with budgets is that we must not exceed capped expenses, and we must reach a minimum level of revenues. There are negative connotations with each of these if the budgets aren’t met. Are you looking in arrears, and comparing historical data to self-limiting numbers? This could explain why budgets aren’t generating better financial results.
Targets - Targets are associated with quantifiable, measurable and achievable goals. Teams work together to accomplish sales and revenue targets, while also identifying efficiencies to manage costs. Set goals, build a team, and celebrate the wins of reaching targets and milestones. Looking forward, and strategizing on how to exceed targets? That’s when everyone pulls together and builds excitement about opportunities.
How do you manage your business? Budgets or targets? We believe budgets can hold you back while targets will propel you forward.