Developing Budgets Key Performance Indicators (KPIs)

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Integrating Strategy With Budgeting

This tool provides strategies on enhancing the budget development process with key performance indicators (KPIs). It emphasizes the importance of integrating strategy with budgeting, suggesting that clear strategic goals should be set before initiating the budgeting process. It also highlights effective communication across all levels of management for better information flow.

With the two samples included in this budgeting benchmarking tool, you can evaluate different review procedures for evaluating proposals. For instance, some companies might foster competition among business units while others might employ negotiation or portfolio-management techniques to make resource allocation decisions. The use of cross-functional teams is encouraged for balanced evaluation of major proposals.

This tool also suggests using balanced measures beyond financial metrics to evaluate proposals, including customer satisfaction and innovation potential, depending on what kind of value a company aims to provide its customers.

Benchmarking company performance is also addressed by employing measures like EVA (economic value added), SVA (shareholder value added), MVA (market value added), and CFROI (cash flow return on investment). 

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