AFP spoke with Prince Oppong, Senior Director, Strategic Finance at PayPal, about how leading organizations transform budgeting from an annual ritual into a strategic discipline — and what it really takes to hold teams accountable when the numbers go sideways.

AFP: You describe the budget as a "contract." What do you mean by that?

Oppong: A budget isn't just an aspirational exercise or an expression of strategy; it's literally a contract between multiple parties: between management and the board, and between the CEO and the management team. It's also the foundation for setting expectations with shareholders and the investment community.

Like any contract, there are real implications to over- or under-performing the commitments. CEOs and executives can lose their jobs, lose a significant portion of their remuneration or face legal exposure if facts were misrepresented. As employees, we are sub-contractors under this contract; the budget is translated from financial numbers into metrics and KPIs that get captured in our goals and priorities to hold all functions accountable.

Most finance teams treat the budget as a process or deliverable. The best ones treat it as a set of commitments. That shift in mindset changes everything: how you build the budget, how you monitor it and what you do when performance deviates.

AFP: How do you make sure the numbers are grounded in reality from the start?

Oppong: Start with the market, not with last year's actuals. FP&A professionals over-index on historical trends and don't pressure-test enough with market or macro data. There is this unspoken assumption that the market stays stable and competition stays constant — neither is true.

Gather data on your competitors. Public companies have SEC filings. Private companies often publish shareholder letters. Industry research covers the rest. Map your strategic goals against theirs, note where you overlap, and assess each side's relative strengths and the moves you can anticipate. That should inform how you build your plans and set aspirations.

Here's a concrete example: say your product's top-line is growing at 5%, one point faster than the prior year. The market is growing at 8%, two points higher than last year. Competitors are also growing at 9–10%. A 5% result feels decent, but it means you're losing share. Do you accept that? Do you know why there's a shortfall? Should you target 6–8% instead? If so, you'd be growing at or ahead of the competition, so the question becomes: What specifically would it take to get there? Where in your product or technical offering do you need to bridge? Which market segments need higher penetration? Those questions force honest conversations that a spreadsheet built from prior-year assumptions never would.

AFP: What about stretch goals — are they motivating or demoralizing?

Oppong: Both, potentially. But I come down firmly on the side of stretch goals.

Management teams naturally gravitate toward incremental improvement. Without a significant gap to close, few leaders step back to challenge their assumptions, rethink how they work or find the innovation needed to generate outsized returns. The gap is uncomfortable by design; it's supposed to pressure-test your thinking and challenge conventions.

The key is that every leader should approach it with an open mind and identify ways they could actually achieve it. What would it take to deliver that stretch goal? Is it an incremental investment or a reprioritization? Assess the associated risks and dependencies, and present options to the CEO or leadership. Don't be passive and dismissive — engage with the stretch goal. It's about making progress and capturing incremental upside, not necessarily hitting every number perfectly.

AFP: Once the strategy is set, how do you get all the departments pulling in the same direction?

Oppong: Interlock sessions. Once the strategy and execution plan are developed, every team sits together to align their tactics, priorities and resource commitments. This is the hardest part of the process.

Sales identifies which customers they'll pursue and what levers — pricing structure, incentives, product bundling — they'll use to win them. Engineering may have planned 100 engineers on an internal project, but given the new priorities, that work needs to pause so they can focus on what sales actually needs. Risk evaluates whether growth initiatives could increase fraud exposure. These critical functions need to commit resources and understand their role in enabling the plan's execution.

Finance's job is to quantify the investment required and size any trade-off implications. If you relax risk approval thresholds, fraud losses go up — is the revenue worth it? Which product roadmap do you prioritize given resource constraints, and what does it mean to the bottom line? You bring the numbers to inform the decision, but that decision has to be filtered through the company strategy: How important is this market? Are we acquiring customers whose lifetime value justifies the upfront cost?

Leaders come out of interlock having made one of two decisions: commit to delivering the plan as agreed, or determine it isn't feasible without changing the approach or securing additional investment. It can be chaotic because of the cross-functional dependencies. But that chaos is productive — you come out with a clearer picture of where the plan needs de-bottlenecking.

AFP: What happens mid-year when the plan isn't working?

Oppong: Execution typically falls short for one of four reasons: demand softening (macro downturn), poor product or technical execution, ineffective go-to-market motions or competitive pressure. At PayPal, we track our performance against plan and against market data across key markets. Local teams and our competitive intelligence function monitor e-commerce spend trends from consumer panels, market reports and competitor data — giving us a live read on whether we're growing with the market or losing ground.

Say the market is growing at 12%, our goal is 10%, but actual growth is only 7%. The questions become: Did we execute our initiatives? If yes, why aren't they producing what we expected? Do they need more time, or are they simply not effective? What other levers can we pull?

We look at product performance stats and the efficiency of our investments. Is marketing spend driving the ROI we expect? If we don't believe effectiveness will improve in the second half, we redeploy that investment in areas that will drive margin incrementality. The decisions that come out of this are guided by value creation, not meant to be punitive to the function leader. If the team demonstrates an ability to improve ROI, funding can be restored.

AFP: That kind of reallocation sounds politically difficult. How do you make it work?

Oppong: It requires CEO and CFO support. Full stop.

Mid-year reallocation has to become a cultural norm, and that norm has to come from the top. Leadership holds teams accountable for their commitments and reinforces that there are no sacred cows — no program is immune from reallocation if it isn't delivering.

That makes the conversation easier for finance. We point to the data, explain that an initiative isn't delivering and redirect resources to our highest-ROI products. Without that leadership backing, managers resort to narrative to explain away underperformance. The conversation stops being about data and starts being about politics. You can't win that fight on your own.