It’s planning season. You’ve spent weeks going back and forth with your CEO, your board, and every functional lead. The company plan is finally set. ARR goals, burn targets, hiring plan, all agreed. You close your laptop and think, finally, we’re done.
And then someone asks, “So what’s my budget?”
In my experience, for a while, you can dodge that question. When the company is small, say under 50 people, you don’t really need department budgets. Everyone is still close enough to the action that they know what’s happening. But once you cross that threshold, you need to give leaders some structure.
Not because you want to control them. Because you want to empower them.
That’s the part people often miss about budgets. They’re not about restriction. A well-designed budget is about autonomy. It’s a clear set of boundaries that gives leaders the freedom to make decisions inside them.
I learned that the hard way.
At Intercom, our first department budgets were a mess. We tried to track everything: software, snacks, Uber receipts, every little detail. It was chaos. Eventually, we found something that worked.
We split spend into just two buckets: recurring and one time.
Recurring spend was things like salaries, software, and rent. One time spend was travel, bonuses, and learning and development. The rule was simple. Money could move freely within a bucket but not between them. You could trade a signing bonus for a team offsite, but not turn it into a permanent raise.
That small distinction changed everything.
Instead of “I need more budget,” conversations became “I can shift this part of my budget.” Finance got clarity. Leaders got ownership.
We still had a few special categories, things like hosting costs or recruiting fees, but those were the exceptions. For most teams, two buckets were enough.
What I love about this system is that it strikes the right balance between control and flexibility. It protects the company plan while giving leaders room to operate. And it turns the budgeting process from something people dread into something that actually builds trust.
Budgets are one of those things that seem like a finance exercise. But really, they’re a management tool. They tell people: here’s the space you can play in. Here’s where you have freedom. Here’s how you stay aligned.