In July we did a webinar focused on the Budget process for 2027, and we asked attendees several questions about their budgeting process. 

Their answers don't represent every UK business, but they give an interesting snapshot of the questions leadership teams are dealing with as 2027 planning begins. 

Almost two thirds were behind budget 

We asked attendees whether they were on track to hit their budget for 2026. 

Just over a third, 35%, said they were on track or ahead. Another 39% said they were close but a little behind, while 25% told us they were well off track. 

A variance from budget isn't unusual and it doesn't necessarily mean the plan was wrong. Businesses have been dealing with a very sluggish economy and pressures from all angles. 

If actual performance starts moving away from budget, management needs to understand why. Some differences may be temporary or just down to timing differences. Others may point to a change that needs to be reflected in forecasts, cash planning or operating decisions. 

That makes the review process just as important as setting the budget in the first place. 

Who owns the budget? 

A separate poll asked people to describe their budgeting process. 

Thirty-five per cent said it was a strategic leadership process. Twenty-eight per cent described it as mainly finance-led, while a further 28% said it was mostly based on the previous year with adjustments. 

Six per cent had no formal process and 3% said their process varied from year to year. 

Finance teams naturally have an important role in budgeting. They understand the numbers, reporting requirements and financial position of the business. 

But many assumptions sitting behind a budget belong elsewhere in the organisation. 

Sales leaders will have the clearest view of the pipeline. Operations will understand capacity constraints. People responsible for recruitment will know where additional resource may be needed. The Leadership team will have views on investment, pricing and growth. 

Bringing those conversations together can produce a budget that reflects the decisions the business expects to make, rather than simply extending the previous year's figures. 

2027 planning is already getting under way 

There was also a noticeable difference between when respondents finished their 2026 budget and when they planned to begin work on 2027. 

Only 13% said their 2026 budget had been finalised before November. Thirty-one per cent completed it in November, another 31% in December and 18% in January. 

Twenty-eight per cent planned to begin budgeting in September and 35% in October. Taken together, almost two thirds expected to start during those two months. 

By the end of October, 84% expected their budgeting process to be under way. 

Starting earlier can give leadership teams more time to test assumptions before numbers become fixed. It can also create room to consider alternatives. 

What happens to cash if sales are slower than expected? What does additional recruitment mean for overheads? How much headroom is available for investment? Which costs move with revenue and which remain fixed? 

There may not be one answer. But considering those questions before the year begins can make the budget more useful once trading starts. 

Use 2026 to inform 2027 

Perhaps the most useful starting point for next year's budget is this year's experience. 

Businesses that are currently behind budget can examine where the difference arose. Those that are ahead can ask the same question. Stronger-than-expected performance can be just as informative as a shortfall. 

The aim is to separate assumptions that still hold from those that need revisiting. 

For some businesses, that may mean changing the sales forecast. For others, the bigger issue may be margin, staffing, investment or cash. 

A budget can't remove uncertainty from the year ahead. What it can do is make the financial consequences of different decisions easier to see, giving the leadership team a firmer basis for deciding what comes next.