The preparation of the Operating Expenses Budget (OPEX) is a fundamental analytical process for financial management. Its objective is to project in detail the resources necessary for the operational functioning of the organization, consistent with its income, its business model and its sources of financing.
The allocation of these resources must align with the company’s strategy and business objectives. As a general rule —with exceptions justified by the stage of business growth— the growth of operating expenses compared to the same period of the previous year should be less than sales growth. This discipline allows to preserve financial health and maintain a favorable operating lever. The Opex budget must be built in a collaborative way: the functional units must lead their own projections, guided by direct spending managers, not only by the financial area.
Rolling 0: The base hypotheses
In the initial stage of the budget cycle —known as Rolling 0, within quarterly methodologies that cover January to December— the base macroeconomic hypotheses are established: expected inflation, representative market rate, interest rates, among others. These variables must be rigorously defined, since they directly impact spending lines indexed to the IPC or the exchange rate, such as leases, logistics or IT.
Internally, another fundamental component is the definition of salary adjustments, headcount projections, leveling and new hires, especially relevant in companies where the payroll represents a significant percentage of the cost structure.
Variable expenses and their alignment with the P&L
In coordination with the commercial and marketing areas, the resources that will allow the projected income are budgeted: advertising campaigns, promotions, trade marketing and launches. It is necessary to correctly model the variable expenses, which depend on the volume of sales, clearly establishing the assignment drivers —for example, the percentage of spending on advertising on sales—.
The classification of expenses by nature — payroll, social security, fees, insurance, leases — must be consistent with the income statement structure. This correspondence facilitates subsequent monitoring and guarantees consistency in communication between teams. Review and validation by area leaders is a mandatory step before consolidating information.
From R0 to R3: The Rolling Forecast Live Cycle
The adoption of a Rolling Forecast methodology transforms this process into a live and continuous cycle. Instead of building a new budget from scratch every time, it starts from the previous version —from R0 to R1— to incorporate business changes: income above or below what is expected, changes in utility rates, creation of new positions or adjustments for unforeseen inflation.
Under a quarterly methodology, four versions of the budget are built throughout the year —R0, R1, R2 and R3— always maintaining an annual horizon that is updated in each quarter. The monthly review of the differences between the actual expense and the rolling budget allows you to identify inefficiencies and deviations, turning follow-up into a tool to learn and adjust, not a result judgment.
Clarus Council: The true value of the Rolling Forecast is not in building the budget, but in the quality of the analysis and the adjustments that are derived from it.
At Clarus Consultores we help you build an Opex budget under Rolling Forecast that fits the real pace of your business. Let’s talk about the efficiency of your spending structure.