Budget kickoff & target design: Start fast and stay aligned

Finance teams may not have an off-season, but they absolutely have an in-season: the three-month sprint that is the annual budgeting process. There’s arguably no more important time on the calendar for us spreadsheet warriors.

It’s a short window, and a hectic one. Which means getting started on the right foot is invaluable.

But year after year, too many teams stumble out of the gates. The gap between leadership’s expectations and what departments can realistically deliver is a mile wide. Inputs come in late in all manner of formats. Finance keeps the whole thing together with duct tape, index-matches, and sheer power of will.

We recently conducted a survey with 250 finance professionals to gauge how finance teams are approaching the 2026 budgeting season. In this blog, we’ll dive deeper into what we found around kickoff and target design—and how small tweaks to both can set you up for success throughout the rest of the process.

How do I nail my budget kickoff?

Here’s our prescription based on conversations with customers and our recent budgeting survey.

Go with a hybrid approach

Many teams kicked off their annual planning a month or so ago, and top-down was the most popular starting point:

It’s understandable why many teams go this route. Top-down feels structured and efficient: leadership sets the plan, and departments execute it. But it leaves the door wide open for misalignment.

Finance ends up reconciling two different stories: what leadership wants to happen and what teams are actually resourced to do. Closing this gap becomes a slow grind of endless revisions. All sides start the process on the defensive.

In our experience, a hybrid kickoff blends the best of both worlds: the clarity and structure of top-down with the on-the-ground reality of bottom-up.

How hybrid works in practice

• Leadership defines ranges for growth, margin, and free cash flow. These should be directional, not hard caps. For example: 25% ARR growth, ≥70% gross margin, quarterly FCF between –5% and +5%.
• Finance shares these high-level expectations with department heads, who then submit their first-pass budgets with these ranges in mind.
• Finance pulls the inputs into a rough v1 and flags the biggest gaps between the two sides. They can then work with departments to figure out tradeoffs where necessary.

The advantages of a hybrid kickoff

1. Speed. You avoid weeks of bottoms-up modeling that gets thrown out the window the minute leadership sees it.
2. Ownership. Budget owners understand the targets and feel responsible for hitting them.‍
3. Credibility. The first draft is grounded in input both from leadership and budget owners.

Some teams may still find that they like the structure of top-down or the freedom of bottom-up. But for the vast majority, hybrid is the way to go.

Time-box the first week

Regardless of how you kick off your budgeting process, week 1 sets the tone for everything that follows. If teams are confused about what’s expected of them, or feel that finance’s deadlines are unrealistic, you risk losing buy-in before the thing gets off the ground.

The schedule for the first week needs to be tight.

Day 0-1: Set the ground rules and start the clock

Department heads should receive an email that spells out the rules of the game:

Guardrails

These are the lines teams will have to plan within (growth, margin, etc.). Explain to department heads that these aren’t hard caps, but if they submit a plan outside these ranges, they’ll need to justify it and propose alternatives.

Market/macro assumptions

Everyone needs to be working off a similar set of macro and market assumptions. We’ll cover this in more detail in a bit.

Planning sequence

Explain the order in which the process will play out, which is usually as follows:

1. Targets: These will come from leadership—overall growth, margin, and cash flow expectations.
2. Revenue: What will each department bring in to deliver on leadership’s targets?
3. Headcount: Who’s needed to hit the plan, and when?
4. Opex: Tools, vendors, programs, and other discretionary spend.

Planning out of order—say, submitting Opex before revenue and hiring are locked—can result in avoidable rework later on.

Days 2-3: Distribute budget templates

Now that the process is underway, it’s time to start collecting inputs. If you haven’t used templates before, now would be a great time to start. More structure up front = less chaos down the line.

Start with these three:

Days 4+: Make sure everyone’s headed in the right direction

Budget owners now have their marching orders and deadlines. Do yourself a favor and hold a 30-minute alignment meeting with each one to clear up any confusion.

Make sure you align on:

• Change policy: Who’s allowed to shift targets, and when do they lock? For example, revenue/margin can only move at Week 2 with CFO sign-off.
• File names and sources: Stick to one source of truth per input. No rogue spreadsheets.

By the end of day 1, budget owners should know exactly what’s expected of them, and when. Don’t leave any room for ambiguity. This is your best shot at keeping the next 12 weeks on track.

Ship a one-page “macro + market” pack with the kickoff deck

External factors dictate performance as much as (and sometimes more than) internal plans. But they’re an under-appreciated budget driver—just 12% of teams in our survey said they captured macro assumptions in their planning packets.

That gap creates problems downstream. 40% of teams blamed over-optimistic projections for first draft misses, many of which stem from divergent views on industry growth, pricing trends, and even macro variables like interest rates.

Sharing a macro + market pack is a low-lift way to ground every budget owner in a shared reality.

What should you include in your macro + market pack?

Keep it focused. This isn’t a comprehensive market outlook—it’s a short list of the external forces that influence performance.

• Demand backdrop: Last 12 months + next 12 month outlook for your category or customer base.
• Pricing environment: Net pricing expectations, discount trends, and competitor behavior.
• Inflation & FX: CPI/PPI, currency rates, and cost of capital (benchmark rates and debt terms if relevant).

For each of these categories, include the value, the source, and the date it was pulled.

How to use it

• Attach it to your kickoff materials. It should be easy to reference as budget owners fill out their templates.
• Track changes. Ideally, these assumptions will be locked for the duration of the budgeting process. If there is a major change, notify budget owners and log the date of the change.

This single page will go a long way toward aligning every budget owner on the same set of external truths.

Come out of the gates strong

If you’re like three-quarters of the finance teams we surveyed, you’ve got 12 weeks or less to get your entire budget packaged and ready to go. The days will feel long, but the months will fly by.

Carefully script week 1 as if the entire process depends on it—because in many ways, it does. It’s your one chance to get buy-in from leadership and budget owners, and set expectations that won’t need undoing later.

Check out our full 2026 annual budgeting & planning and benchmark report for more insights into what makes a great kickoff & beyond.