budget-plan

name	budget-plan
description	Create and manage comprehensive budgets including revenue projections, cost categories, allocation strategy, variance tracking, and approval workflows. TRIGGER when: user says /budget-plan, "create a budget", "budget planning", "allocate budget", "budget template", "annual budget", "quarterly budget".
argument-hint	[department or project name] [time period] [total budget amount]
user-invocable	true

Budget Plan

Create structured, defensible budgets for departments, projects, or the entire organization. This skill walks through revenue projections, cost categorization, allocation strategy, variance thresholds, and approval workflows.

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Step 1 — Define Budget Scope and Parameters

Gather the foundational inputs before building any numbers.

Parameter	Description	Example
Budget Owner	Department or project lead responsible	VP of Engineering
Time Period	Fiscal quarter, half-year, or full year	FY2026 (Jan–Dec)
Budget Type	Operating, capital, project, or zero-based	Operating
Currency	Reporting currency and FX considerations	USD
Total Envelope	Hard cap or flexible ceiling	$2.4M hard cap
Approval Authority	Who signs off at each tier	Dir < $50K, VP < $250K, CFO above
Baseline Reference	Prior period actuals or industry benchmarks	FY2025 actuals

Checklist

• Confirm fiscal calendar alignment (calendar year vs. fiscal year)
• Identify all cost centers and GL codes in scope
• Obtain prior-period actuals (minimum 2 periods for trend)
• Clarify headcount plan and hiring timeline
• Document any board-mandated constraints (e.g., "hold OpEx flat")

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Step 2 — Revenue Projections

Model the revenue side before allocating costs.

1. Historical Trend: Pull 3–5 periods of revenue data; compute CAGR and sequential growth.
2. Pipeline-Weighted Forecast: Apply probability weights to sales pipeline stages.
3. Segment Breakdown: Split by product line, geography, or customer tier.
4. Sensitivity Band: Model optimistic (+15%), base, and conservative (-15%) scenarios.

Revenue Projection Template

Revenue Stream	FY2025 Actual	Base Growth %	FY2026 Base	Optimistic	Conservative
Product A
Product B
Services
Other
Total Revenue

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Step 3 — Cost Categorization

Classify every line item into a standard taxonomy.

Category	Sub-Category	Fixed / Variable	Discretionary?
People	Salaries & Wages	Fixed	No
People	Benefits & Taxes	Fixed	No
People	Contractors	Variable	Yes
Infrastructure	Cloud / Hosting	Variable	Partially
Infrastructure	Software Licenses	Fixed	Yes
Infrastructure	Hardware / Equipment	Fixed	Yes
Go-to-Market	Advertising	Variable	Yes
Go-to-Market	Events & Sponsorships	Variable	Yes
Operations	Office & Facilities	Fixed	No
Operations	Travel & Entertainment	Variable	Yes
R&D	Research Programs	Variable	Yes
R&D	Tooling & Prototyping	Variable	Yes

Checklist

• Every line item maps to a GL code
• Fixed vs. variable classification is validated with Finance
• Discretionary flags are agreed with budget owner
• No "miscellaneous" bucket exceeds 5% of total budget

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Step 4 — Allocation Strategy

Distribute the budget envelope across categories.

1. Priority Ranking: Rank categories by strategic alignment (must-have, should-have, nice-to-have).
2. Baseline Lock: Lock non-discretionary fixed costs first (salaries, rent, committed contracts).
3. Growth Investment: Allocate a defined percentage (e.g., 15–25%) to growth initiatives.
4. Reserve Buffer: Hold 3–5% as contingency for unplanned needs.
5. Quarterly Phasing: Spread allocations by quarter, accounting for seasonality and hiring ramps.

Allocation Summary Template

Category	Annual Allocation	Q1	Q2	Q3	Q4	% of Total
People
Infrastructure
Go-to-Market
Operations
R&D
Contingency Reserve
Total						100%

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Step 5 — Variance Tracking Framework

Define how actuals will be monitored against the plan.

Metric	Threshold (Yellow)	Threshold (Red)	Review Cadence	Escalation Path
Line-item variance	> 5%	> 10%	Monthly	Budget owner -> Dir
Category variance	> 8%	> 15%	Monthly	Dir -> VP
Total budget variance	> 3%	> 7%	Monthly	VP -> CFO
Forecast-to-actual delta	> 5%	> 12%	Quarterly	FP&A -> CFO
Headcount vs. plan	+/- 1 HC	+/- 3 HC	Monthly	HR + Finance

Variance Response Actions

• Yellow: Document root cause; adjust forecast; no reallocation needed.
• Red: Mandatory reforecast within 5 business days; reallocation proposal required; leadership review.

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Step 6 — Approval Workflow

Route the budget through the appropriate sign-off chain.

1. Draft Submission: Budget owner submits to FP&A for structural review.
2. FP&A Review: Validate assumptions, cross-check with headcount plan, flag anomalies (2 business days).
3. Department Head Approval: Sign-off on priorities and trade-offs.
4. Finance Leadership Review: CFO or Finance Director reviews aggregate picture.
5. Executive / Board Approval: For budgets above materiality threshold or with strategic implications.
6. Lock and Publish: Freeze approved numbers in the financial system; distribute to cost center owners.

Approval Checklist

• All assumptions documented and sourced
• Headcount plan reconciled with HR
• Capital vs. operating expenditure correctly classified
• Inter-department transfers and chargebacks reflected
• Prior-period variance commentary included
• Contingency reserve justified

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Output Format

Deliver the budget plan as a structured document containing:

## Budget Plan — [Department / Project] — [Time Period]

### 1. Executive Summary
- Total budget: $X
- Key assumptions (3-5 bullets)
- Major changes vs. prior period

### 2. Revenue Projections (if applicable)
[Revenue table with scenarios]

### 3. Cost Breakdown
[Categorized cost table with quarterly phasing]

### 4. Allocation Rationale
[Priority ranking and strategic justification]

### 5. Variance Thresholds & Governance
[Threshold table and escalation paths]

### 6. Approval Status
[Sign-off tracker with dates]

### 7. Appendix
- Detailed line-item schedule
- Assumption log
- Comparison to prior period

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Quality Checklist

• Revenue and cost figures reconcile to the total envelope
• All line items have an owner and a GL code
• Quarterly phasing sums to annual totals
• Assumptions are explicit, not buried in formulas
• Variance thresholds are realistic and agreed upon
• Approval workflow has clear SLAs
• Document is version-controlled with change log

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Edge Cases

Scenario	Handling Approach
Mid-year organizational restructure	Trigger a budget reforecast; re-map cost centers; preserve audit trail
Unexpected headcount freeze	Lock people costs; redistribute freed funds to highest-priority discretionary items
Currency fluctuation > 10%	Apply hedging assumptions; report in both local and reporting currency
Merger or acquisition mid-cycle	Create a separate integration budget; do not co-mingle with BAU budget
Zero-based budgeting mandate	Require every line item to be justified from zero; no automatic rollover
Grant or restricted funding	Track separately with fund accounting; ensure compliance with donor restrictions