Ah, the annual budgeting process--its very mention can strike fear throughout an organization. But a function so vital to a company's success shouldn't be one that causes heartburn and discord. High-performing organizations are increasingly defined by structures and environments that foster collaboration and transparency. Instilling those qualities into your budget process can make it less painful and most importantly, can yield better results. Here's what you can do to ensure budgeting doesn't budge your team over the edge.

Divide Your Budget by Corporate Priorities, Not By Teams

Many organizations allocate their budget by giving each department a lump sum and then asking them to fill out their priorities. But we think that's putting the cart before the horse--budgets should map to overarching corporate priorities, not functional teams. We collectively set and agree on our yearly initiatives in advance of the budgeting process and ensure alignment and understanding top-to-bottom through the company by presenting them at an all-staff meeting. We then ask our cross-functional teams to build budgets that align to our key corporate priorities. Only then do we put money behind the activities that will help us achieve those initiatives. The process ensures everyone focuses on the big picture of what we're working towards and puts budgets themselves in perspective as a means to an end.

Drive Buy-In and Accountability With An Open and Inclusive Process

Once we've nailed down our corporate priorities, communicated them to the company, and set teams in motion, we develop our budgets and activities in an open and iterative flow. Budgets are discussed up and down the corporate structure and side-to-side, and folks of all levels and functions are involved. When team members are able to share input, they become more invested in the priorities, activities and their success. It also helps hold folks accountable across the organization for the spend that they request. Once the final annual budget is determined, we make sure that it's communicated clearly throughout the company, and that we answer any questions on prioritization, what made it and what didn't, and offer context for any difficult decisions.

Three Budgets: Over, Under, Match

When crafting and proposing their budgets, Okta's team leads divide their budget asks into three options: over, under, and match. Each lead presents their budget with the activities and results they can accomplish if they were to stay under budget, what what they could accomplish if they matched their budget from last year, and what they could accomplish with more budget. This prioritization helps our finance team and executives understand the items that might be superfluous, but also the items that it might be worth spending extra on to make a bigger impact.

Make Your Fiscal Calendar Work for You

There are many different fiscal calendars that companies use to report on their books. Most end at the end of December, some end at the end of August. At Okta, we've chosen a financial calendar that runs from February 1st to January 31st every year. In the enterprise sector, corporate technology budgets often close at the end of December, or reset and are finalized in early January. That makes December and January a critical time for our teams. But, it is also an important time of year for both our employees and customers to relax and spend time with their families during the holidays. We decided on a fiscal year that closes at the end of January to give all of our constituents the time they need to close year end budgets, allocate new budgets, and still have time to relax and energize for the new year.

When you're considering budgeting and fiscal planning, make sure that your fiscal calendar accommodates the things that are most important to you in a collaborative and transparent way: the health of your employees and the success of your customers.