Process:Budget Approvals

Process: Budget Approvals

What is the budget approval process?

The budget approval process is how we set, review, and sign off on our annual operating budget, and how we keep it current through a mid-year reforecast. It ensures we have a board- and investor-ready budget on file, that spending and revenue expectations are grounded in actuals, and that changes are documented and traceable over time.

Why does it matter?

Our budget is the financial plan the company operates against for the year, and the tool we use to manage growth, stay ahead of risk, and make informed decisions about spending and investment. A consistent, well-documented budget process — with regular check-ins, not just annual and mid-year touchpoints — lets us catch drift early and course-correct before small issues become big ones.

This same discipline also carries over to our investor relationships, including obligations like Kresge’s requirement for a submitted annual budget. Investors gain confidence in our numbers as a byproduct of the rigor we apply internally, rather than through a separate exercise.

A note on tools: This process currently runs in a spreadsheet-based budget model, with assumptions and forecasts maintained on separate tabs. The steps, roles, and sign-offs described below are tool-agnostic. If we move to a dedicated financial planning tool in the future, this same structure (assumptions feeding a model, Quickbooks as a source of truth, tab/section-level detail, scenario planning, monthly and quarterly check-ins, and CEO sign-off) should carry over.

Annual Budget Process

Timing: September 15 – November 15 (previous year)

Draft the budget. The Strategic Growth Lead and the Accountant prepare the draft budget, covering expected revenue and expenses for the upcoming year. Current-year and prior-year actuals are used to inform and sanity-check forecasts.

1. Document assumptions. Key assumptions driving revenue and expense forecasts (e.g., pipeline and expected closes, headcount plans) are documented on their own tabs within the budget model, with notes explaining the reasoning. These assumptions feed directly into the budget figures, so anyone reviewing the model can trace a number back to the logic behind it.

2. Build scenarios. The budget model includes base, upside, and downside scenarios so we can assess sensitivity to key assumptions internally, rather than presenting only a single-point forecast.

3. Strategy team review. The strategy team reviews the draft to refine revenue expectations, planned hiring, and other expense assumptions.

4. Controller review (as needed). If the year’s changes have been numerous or significant, a controller reviews the budget and underlying assumptions to confirm accuracy before it goes to the CEO. This isn’t required every year — it’s used when the scale of changes warrants an added check.

5. CEO sign-off. The CEO reviews and signs off on the final budget by November 15. This becomes the base budget for the upcoming operational year.

6. Load into QuickBooks. Once signed off, the budget is entered into QuickBooks for operational tracking and management.

Mid-Year Reforecast

Timing: By July 15

At mid-year, we reforecast the budget using the same process as the annual budget setup above — same roles, same review steps, controller involvement, CEO sign-off, and QuickBooks update. The one thing that’s genuinely new at mid-year is a year-to-date (YTD) review of actual revenue and expenses against the base budget, which informs how assumptions and scenarios get updated for the remainder of the year.

Because we do lightweight monthly and quarterly check-ins throughout the year (see below), the mid-year reforecast tends to surface few surprises — any drift has already been caught and addressed along the way.

What’s different at mid-year:

• YTD review. Before drafting the reforecast, the Strategic Growth Lead and Accountant review YTD actuals against the base budget.
• Assumptions and scenarios are updated, not rebuilt. The existing assumption tabs and base/upside/downside scenarios are updated to reflect what’s actually happened YTD and what’s now expected for the remainder of the year, with notes on what changed and why — rather than starting from scratch.

Monthly & Quarterly Check-Ins

Alongside the monthly close (see Closing Our Books) and quarterly close, we do a lightweight check-in on the budget: comparing actuals to the base budget, noting any emerging variance, and flagging the variance before it compounds. This isn’t a full reforecast — it’s a quick pulse check so drift gets caught and addressed in the month or quarter it happens, rather than surfacing as a surprise at mid-year or year-end.

• When: Monthly, tied to the monthly close; and again at each quarter close.
• Owner: Strategic Growth Lead and Accountant.
• Output: Any notable variance or emerging risk is logged in the Budget Notes and Changes document, even if it doesn’t yet warrant a formal budget change.

Tracking Budget Changes

Any change made to the budget — whether at initial setup, mid-year reforecast, or ad hoc — is logged in the Budget Notes and Changes document. Each entry should capture:

• What changed (line item, amount)
• Why it changed (context/rationale)
• When it changed and who approved it

This document serves as the historical record for “Why does the budget say X?” and is the first reference point when preparing the next reforecast or annual budget.

Budget Requests

At this critical growth stage, every dollar and every hire has a direct impact on our runway and our ability to execute on our revenue goals. If a department needs additional resources after the budget has been approved, the department lead will need to submit a Resource Request form. This process helps us stay intentional about how we spend — whether that’s bringing on a new team member, adding a new expense, or increasing the budget for a planned expense. We don’t want to slow things down, but we want to ensure we’re aligned, thoughtful, and prioritizing the right investments at the right time.

The Resource Request form helps answer the following questions:

• Why is this resource critical for achieving our revenue growth goals?
• What are we trying to solve with this resource?
• What impact will the absence of this resource have on revenue goals?
• What may we need to deprioritize or trade off to fund the request?

After the resource request is submitted, it is reviewed by the Strategic Growth Lead and can be approved, approved with modifications, or denied. If approved, the budget will be updated with the request.

Roles & Responsibilities

We expect to expand this list as the business grows or as new performance indicators become necessary.

Role	Responsibility
Strategic Growth Lead	Prepares draft budget/reforecast; owns revenue and hiring assumptions
Accountant	Prepares draft budget/reforecast; owns expense actuals and QuickBooks entry
Strategy Team	Reviews and refines revenue, hiring, and expense assumptions
Controller	Reviews budget/reforecast and assumptions for accuracy when changes are large or numerous (not required every cycle)
CEO	Final review and sign-off on budget, reforecast, and 3-statement overview

Investor Sign-Off

If we have a budget that must be submitted to an investor as part of our reporting obligations, we will follow the same steps as the Annual Budget Process in addition to any other requested inclusions (e.g. a narrative of what to expect in the coming year).

Kresge is the only investor that requires an approved budget to be submitted before the upcoming fiscal year. Our budget for the upcoming year is due to Kresge by November 30 and we have this obligation through 2028.

No other formal board or investor sign-off step is part of this process at this time.