Publish Date

Dec 02, 2020

Budgeting & Forecasting in Uncertain Times

Michael McKenna, Managing Director | George Smith, Senior Director

Service / Industry: Financial Services

The uncertainty created by COVID-19, the 2020 presidential election, civil unrest, and other economic stresses have created volatility in company operations and performance. As a result, companies are facing a significant challenge in business planning and forecasting and need to adjust their approach accordingly.

The upcoming annual budgeting cycle must be more than a financial exercise—it should be a collaborative effort among finance, sales, operations, and other functions. The budget is one element of the overall business plan used to make decisions on allocation of capital, to align the activities of the business, and to drive ownership/accountability of the operating plan.

Decisions related to potential investments, the proper level of inventory to hold, and employee bonuses and incentive compensation, can all have significant implications in an uncertain environment. If you’re too conservative – you may be undersized and miss an opportunity to take market share or will trail your competition once a full recovery is underway. If you’re too aggressive – you may build up too much inventory or make capital investments which drain your cash and jeopardize your financial stability.


Michael McKenna

Michael McKenna is a Managing Director with Alvarez & Marsal Private Equity Services in New York, specializing in CFO Services. His primary areas of concentration are working capital improvement, financial and management reporting, merger integration, financial systems implementation and leadership through ownership transitions. With more than 25 years of industry and consulting experience, Mr. McKenna has advised clients in industrial products, business services, high-technology, and the public sector.

George Smith

George Smith is a Senior Director with Alvarez & Marsal’s Private Equity Performance Improvement team in Chicago. With more than 25 years of management and consulting experience, he has worked across a variety of sectors including manufacturing, distribution, transportation and financial services. Mr. Smith specializes in process and performance improvement initiatives, post-close transaction integration, financial planning and analysis, cost reduction strategies, working capital improvements, liquidity and cash management, financial reporting and finance organization transformation.