Issue link: http://read.dmtmag.com/i/230154
Proactive Budgeting for 2014 Five changes you need to make BY RICK BOLAND or wineries and vineyards of all sizes, financial forecasts and budgets can be overwhelming. They're labor-intensive, and they impact nearly every facet of the operation. Close your eyes and think about your budgeting process. It starts with meeting with ownership and the management team, compiling data and making key assumptions, which can take months to assemble. By the time you have a spreadsheet populated with numbers management and ownership agree on, the budget may be outdated – requiring you to start the process all over again. If you're like most members of the wine industry, you probably view budgeting as an onerous task – and there are good reasons 132 V I N EYA R D & WINE RY M ANAGEM ENT | for this. Developing a budget is quite involved, capturing cost and cash-flow impacts are challenging, there's a lot of variability in grape prices, projecting revenues is difficult, and cash operating cycles are very long. These issues are all valid, but if you can address budgeting in a proactive rather than reactive way, you'll be rewarded with more accurate budgets and timely financial forecasts. So what five things can you do now to improve and streamline your budgeting process? AT A GLANCE + Developing a budget is a daunting process, and one that many people put off. + It's best to address budgeting in a proactive rather than reactive way. + Use budgeting in conjunction with forecasting. They are not the same thing. + Use historical data to make 1. DON'T MISTAKE A BUDGET FOR A FORECAST assumptions about what you think the future will look like. Budgeting helps you manage what will happen in a shorter time Jan - Feb 2014 w w w. v wm m e d i a . c o m