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budget-creation skill

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This skill facilitates end-to-end budget creation and forecasting by guiding planning, assumptions, line-item build, consolidation, approvals, and

npx playbooks add skill lerianstudio/ring --skill budget-creation

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SKILL.md

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---
name: budget-creation
description: |
  Complete budgeting and forecasting workflow covering annual budgets, departmental budgets,
  rolling forecasts, and variance analysis. Delivers documented budgets with approval trails.

trigger: |
  - Creating annual operating budget
  - Building departmental budgets
  - Developing rolling forecasts
  - Budget-to-actual variance analysis

skip_when: |
  - Analyzing historical financials → use financial-analysis
  - Building valuation models → use financial-modeling
  - Cash flow specific work → use cash-flow-analysis

related:
  similar: [financial-analysis, financial-modeling]
  uses: [budget-planner]
---

# Budget Creation Workflow

This skill provides a structured workflow for comprehensive budget development using the `budget-planner` agent.

## Workflow Overview

The budget creation workflow follows 6 phases:

| Phase | Name | Description |
|-------|------|-------------|
| 1 | Planning | Define budget scope, methodology, timeline |
| 2 | Assumption Development | Document all budget assumptions |
| 3 | Line Item Build | Build detailed budget by line item |
| 4 | Consolidation | Consolidate and review totals |
| 5 | Approval | Obtain required approvals |
| 6 | Documentation | Finalize with version control |

---

## Phase 1: Planning

**MANDATORY: Define budget parameters before building**

### Questions to Answer

| Question | Purpose |
|----------|---------|
| What is the budget period? | Sets time scope |
| What methodology will be used? | Incremental vs ZBB |
| Who are the budget owners? | Establishes accountability |
| What is the timeline? | Sets deadlines |
| What are the constraints? | Defines boundaries |

### Methodology Selection

| Method | When to Use | Characteristics |
|--------|-------------|-----------------|
| Incremental | Stable operations | Prior year + adjustments |
| Zero-Based | Cost reduction | Every item justified |
| Driver-Based | Scalable operations | Tied to activity drivers |
| Top-Down | Corporate targets | Allocate from total |
| Bottom-Up | Department input | Aggregate from detail |

### Blocker Check

**If ANY of these are unclear, STOP and ask:**
- Budget period
- Methodology choice
- Approval requirements
- Timeline constraints

---

## Phase 2: Assumption Development

**MANDATORY: Document ALL assumptions before building**

### Required Assumptions

| Category | Examples |
|----------|----------|
| Revenue | Growth rate, pricing, volume |
| Headcount | Hiring plan, attrition, merit |
| Inflation | General inflation, specific items |
| Timing | Seasonality, project timing |
| Strategic | Initiatives, investments |

### Assumption Documentation Standard

| Element | Requirement |
|---------|-------------|
| Assumption statement | Clear, specific description |
| Value | Quantified assumption |
| Rationale | Why this assumption |
| Owner | Who owns this assumption |
| Sensitivity | Impact if wrong |

### Anti-Rationalization

| Rationalization | Why It's WRONG | Required Action |
|-----------------|----------------|-----------------|
| "Same as last year" | Each budget is independent | **RE-EVALUATE assumption** |
| "Industry standard" | Industry varies | **CITE specific basis** |
| "Conservative estimate" | Conservative needs quantification | **DEFINE conservatism** |

---

## Phase 3: Line Item Build

**Dispatch to specialist with full context**

### Agent Dispatch

```
Task tool:
  subagent_type: "ring:budget-planner"
  model: "opus"
  prompt: |
    Build budget per these specifications:

    **Period**: [budget period]
    **Type**: [annual/departmental/project]
    **Methodology**: [from Phase 1]

    **Assumptions**:
    [From Phase 2]

    **Constraints**:
    [Any targets or limitations]

    **Prior Period Reference**:
    [Attach prior budget/actuals]

    **Required Output**:
    - Line item detail with owners
    - Assumption linkage for each item
    - Variance to prior period
    - Monthly/quarterly phasing
```

### Required Output Elements

| Element | Requirement |
|---------|-------------|
| Budget Summary | High-level totals |
| Line Item Detail | Every line with owner |
| Assumptions | Linked to line items |
| Phasing | Monthly or quarterly |
| Variance | To prior period/target |
| Version | Version number and date |

---

## Phase 4: Consolidation

**MANDATORY: Review consolidated budget for reasonableness**

### Consolidation Checks

| Check | Validation |
|-------|------------|
| Math accuracy | All totals foot and cross-foot |
| Assumption consistency | No conflicting assumptions |
| Intercompany | Eliminations if applicable |
| Completeness | All departments included |

### Reasonableness Tests

| Test | Validation |
|------|------------|
| YoY change | Explainable variance |
| Margin trends | Consistent with strategy |
| Headcount | Reconciles to HR plan |
| CapEx | Within investment guidelines |

---

## Phase 5: Approval

**MANDATORY: Document all approvals**

### Approval Workflow

| Level | Approver | Documentation |
|-------|----------|---------------|
| Department | Department head | Written approval |
| Finance | Controller/CFO | Written approval |
| Executive | CEO | Written approval |
| Board | Board/Committee | Meeting minutes |

### Approval Documentation

| Element | Requirement |
|---------|-------------|
| Approver name | Full name and title |
| Approval date | Specific date |
| Version approved | Version number |
| Conditions | Any conditions or caveats |

---

## Phase 6: Documentation

**MANDATORY: Finalize with full audit trail**

### Documentation Checklist

| Element | Status |
|---------|--------|
| All assumptions documented | Required |
| All line items with owners | Required |
| All approvals documented | Required |
| Version control in place | Required |
| Change log complete | Required |

### Output Format

See [shared-patterns/execution-report.md](../shared-patterns/execution-report.md) for base metrics.

**Budget-Specific Metrics:**
- line_items: N
- departments: N
- assumptions_documented: N
- variance_to_prior: X.X%
- approval_status: DRAFT/SUBMITTED/APPROVED

---

## Pressure Resistance

See [shared-patterns/pressure-resistance.md](../shared-patterns/pressure-resistance.md) for universal pressures.

### Budget-Specific Pressures

| Pressure Type | Request | Agent Response |
|---------------|---------|----------------|
| "Make the numbers work" | "Budgets must reflect realistic projections. I'll document achievable targets." |
| "Skip departmental review" | "All budgets require owner sign-off. I'll coordinate with departments." |
| "Use last year's assumptions" | "Each budget needs fresh assumption validation. I'll re-evaluate all assumptions." |
| "We need it by EOD" | "Quality cannot be compromised by timeline. I'll document what's achievable." |

---

## Anti-Rationalization Table

See [shared-patterns/anti-rationalization.md](../shared-patterns/anti-rationalization.md) for universal anti-rationalizations.

### Budget-Specific Anti-Rationalizations

| Rationalization | Why It's WRONG | Required Action |
|-----------------|----------------|-----------------|
| "Just add X% to last year" | Every item needs justification | **JUSTIFY each item** |
| "Department requested it" | Requests need validation | **VALIDATE request basis** |
| "We always spend this much" | Historical ≠ justified | **JUSTIFY current need** |
| "Round number is close enough" | Precision matters | **USE calculated amounts** |

---

## Execution Report

Upon completion, report:

| Metric | Value |
|--------|-------|
| Duration | Xm Ys |
| Line Items | N |
| Departments | N |
| Assumptions | N documented |
| Approval Status | DRAFT/APPROVED |
| Result | COMPLETE/PARTIAL |

### Quality Indicators

| Indicator | Status |
|-----------|--------|
| All assumptions documented | YES/NO |
| All items have owners | YES/NO |
| All approvals obtained | YES/NO |
| Version control in place | YES/NO |

Overview

This skill provides a complete budgeting and forecasting workflow for creating annual, departmental, and rolling forecasts with formal variance analysis and documented approval trails. It enforces a six-phase process—planning, assumptions, line-item build, consolidation, approval, and documentation—to produce auditable budget deliverables. Outputs include detailed line items, assumptions linkage, phasing, variance to prior periods, and versioned approvals.

How this skill works

The skill guides users through mandatory checkpoints: define scope and methodology, capture and quantify all assumptions, dispatch a specialist agent to build line-item detail, and consolidate for reasonableness and math accuracy. It records approvals at department, finance, executive, and board levels, then finalizes a version-controlled package with a full audit trail and execution metrics. Built outputs include budget summaries, per-line owners, monthly/quarterly phasing, and variance analytics.

When to use it

Creating an annual corporate or departmental budget from scratch
Preparing rolling forecasts during planning cycles
Rebuilding budgets after strategic changes or headcount plans
Producing an auditable budget with formal approval trail
Performing variance analysis against prior period budgets or actuals

Best practices

Define budget period, methodology, owners, timeline, and constraints before any build
Document every assumption with value, rationale, owner, and sensitivity
Dispatch the line-item build with prior period references and explicit constraints
Run consolidation checks: math, assumption consistency, intercompany eliminations, and completeness
Capture written approvals with approver name, date, version, and any conditions; maintain version control and change log

Example use cases

Corporate finance teams producing an annual consolidated budget for board approval
Department heads building detailed line-item budgets tied to headcount and project timing
FP&A teams running rolling forecasts and publishing variance reports to executives
Finance teams enforcing governance when external pressure suggests shortcuts
Audit teams reviewing evidence of assumptions, approvals, and version history

FAQ

What is mandatory before building the budget?

You must define the budget period, choose a methodology, identify budget owners, confirm the timeline, and document approval requirements.

How are assumptions managed?

All assumptions must be documented with a clear statement, quantified value, rationale, owner, and sensitivity; no assumption should default to prior year without re-evaluation.

What outputs will I receive from the build phase?

A versioned package containing budget summary, full line-item detail with owners, linked assumptions, monthly/quarterly phasing, variance to prior period, and version metadata.