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Life Hacks for Retail LendersSorry to hear that you have to develop the annual expense budget for your unit. Lose a bet? Draw the short stick? Someone has incriminating photos of you taken during an office party? Well, don’t worry. We’ve got some quick hacks for you.

Last year’s budget: your first stop. Why reinvent the wheel? Start with the following from last year: proposed budget, approved budget, and actual budget. Review all three thoroughly. Don’t lift a pencil until you know all three sets of numbers inside and out.

Know thy assumptions. What assumptions will you need to use? For example, annual net receivables might drive collections capacity. Think about the what if’s related to the economic outlook, your competition, and your customers. Have your vendors and suppliers indicated that there might be price increases for their goods and services? If so, assume a conservative percentage increase if you don’t have specific details. Clearly lay out your assumptions before you start your work.

Torture those assumptions. Once you’ve determined your assumptions, rethink and analyze them. For example, are the Annual Net Receivables forecasts usually double the actuals? Nothing will derail your budget faster than faulty assumptions. Check your assumptions with reports, data, and experts in your organization. Plan accordingly after you’ve tortured your assumptions.

If in doubt, double it. This doesn’t apply just to project timelines. It applies to expense figures too. If you’re unsure what to forecast for a line item, double last year’s actual. This should guarantee that this year’s actuals won’t exceed your forecast. Be ready with a good rationale for doubling. Your colleagues may have read this as well. They may also feel it’s their duty to torture your assumptions too.

Sort by dollar amount. Avoid the trap of wasting time looking for cost saves on small line items. It’s not worth it. For example, don’t spend a day looking for a cheaper supplier of sticky notes when you only spend $500 per year on them. Focus on the big line items first. Those are the areas where if you do your homework (laying out and torturing your assumptions) you’ll find cost saves. Remember this rule of thumb. Your budgeting time for a budget line item should align with its size.

Only people with warped ideas of what’s fun enjoy doing expense budgets. You know who I’m talking about. They never emerge from their offices or cubes – not even on Taco Tuesday’s. Will following the hacks above make doing your budget more fun? Probably not, but they’ll make it easier and faster. You might even become something of a legend around the office.

For those challenging times when you need to get things done effectively, try these tips & tricks. Life Hacks for Retail Lenders


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