Your budget is a map of your strategy.
A poorly managed budget is a reflection of a poorly managed strategy. For many marketers, managing a marketing budget is simply one of the worst parts of their job. But this left-brain task doesn’t have to limit you or your marketing team’s creativity. In fact, if you manage a budget properly, your budget can guide strategic decisions and allow you to steer your marketing ship through the day-to-day changes in your business.
While there are many great budgeting software solutions for marketers, such as Allocadia, I’ve developed this Google sheets template as a useful tool when managing budgets in a fast-moving hyper-growth company. The template allows you to keep tabs on your expenses while targeting an overall budget goal for each month, quarter, and year. The template is designed to align with your company’s departmental accounting codes, and your finance team will love you for it!
How to Use the Template
There are three tabs in the template—Instructions, Detail, and Summary. The primary tab is “Detail,” which includes each expense in the month it occurs (accrual accounting). “Summary” includes a complete summary of each accounting code by month. The Summary sheet allows you to compare your budget vs. actual spending throughout the year.
I’ve always elected to keep discretionary spending separate from personnel spending—such as salaries, bonuses, and benefits. By removing the personnel line items, you can share the entire budget file with your team and allow them to enter expenses as they occur, keeping a continuous “living” document reflective of your current budget at any given time. This also gets you out of manually entering budget details at the end of the month, and provides a bit of executive marketing experience for your team.
For most marketing teams, discretionary spending is ~50% of the overall budget; personnel spending is the other 50%. In this example for Cookie Monster Inc, the marketing team has a $3.6M annual budget with $1.8M in salaries, bonuses, and benefits. The remaining $1.8M is used throughout the year to cover discretionary spending, including advertising, events, marketing programs, software, contractors and several other accounting codes.
When you first access the template, follow the steps on the “Instructions” tab to make your own copy. Let’s walk through several items in the budget:
The first step in creating your own budget is to make sure your budget buckets match your Finance department’s codes. This may seem like an odd place to start, but I’ve found that connecting your budget buckets to the Finance sections dramatically simplifies any reporting and audits that happen in the future. These sections (“buckets”) are often referred to as “GL codes” or general ledger codes.
In the template provided, you’ll find a few examples already listed, such as:
- 80010 Internet Advertising
- 80050 Tradeshow Advertising
- 80070 Marketing Programs
After making your own copy of the template, you should replace these codes and names with your own. You may need to create additional codes or delete ones you don’t need. Once you complete these, be sure to update the formulas in lines 2 and 3 on the Detail tab to adjust for any GL buckets added or removed. These two lines calculate total expenses by month and quarter.
Down the first column of the Detail tab, you’ll find sample marketing expense labels. Some expenses are one-time; others are recurring. Next, you’ll find an owner for that expense—this is handy if/when you need to determine who to follow up with regarding expenses. The core section includes the individual amount for each expense. I used a simple color scheme: yellow highlighted cells for future or planned expenses, bright green for confirmed/booked expenses, and dark green for paid expenses. This makes it simple to adjust the expenses on the fly by moving dollar amounts between yellow buckets. For example, in the template, you could easily reduce the Facebook media spending from $35,000 per month to $20,000 per month, and move the balance to another marketing expense.
Toward the far right end of the Detail sheet, you’ll find Average and Total calculations, which are handy when comparing various expenses. In the top right corner, you’ll find a section that provides the total marketing budget, the amount you are pacing toward, and how much you are above or below that total. The 2020 Target cell is used to split discretionary spending from salaries. In this example, the total marketing budget is $3.6M and planned salaries for the year are $1.7M.
NOTE: I recommend keeping the personnel salaries in a separate non-shared file, as that information is sensitive. Share the budget file with your team, to enter information as expenses are confirmed, but avoid sharing the marketing team’s salaries. The 2020 Target cell simply allows you to connect the two based on the total expense.
Along the bottom of each department code bucket you’ll find a monthly total for that GL code, as well as two more rows. These rows are used to provide a month-end comparison to the amounts Finance paid in each department.
For example: in the Internet Advertising bucket, we see that $91,000 in expenses was confirmed in January. However, in cell C16, we see that Finance paid out $90,050. The delta (∆) is $950. This simply means that we budgeted $91,000 for media, but Finance actually paid out $90,050—often indicating that all of our planned media did not run.
At the end of each month, you can easily compare planned vs. spent and adjust your individual expenses to match up with the payment amounts from Finance. This also can help prevent mistakes where Finance has not yet paid one of your vendors or has paid too much to a vendor—an important failsafe to help keep tabs on your marketing expenses.
In the Summary tab, you’ll find three copies of the budget expenses. The first copy contains actual expense totals by month, taken directly from the Detail tab. The second copy contains your budgeted amount, the amount estimated at the start of your fiscal year for each GL code. The third copy contains a simple comparison of your actuals vs. budget from the start of the fiscal year.
I recommend sitting down at the start of your budget planning cycle and filling in all of the actuals and placeholders from the Detail tab and, once finalized, copying those values from the actuals section to the budget section. This creates a snapshot that allows you to quickly see which GL codes you are spending much more or less on compared to your original plan.
I hope you are able to utilize this budgeting template to run effective and relevant marketing programs that connect your budget and strategy!