Budgeting season is almost here. For many CFOs and budget managers, it will be a time of an endless stream of data, requests and revisions.
But what happens if after all the time, energy and resources devoted to it, the budget still doesn’t quite stack up?
You likely already know the answer.
The worst part? Discrepancies might not even be discovered until months later, well into the first quarter. By then, it can be too late to fix without starting fresh or wasting even more time.
These issues happen more often than you’d probably like to believe.
Here’s the good news: there are best practices, along with modern systems, that your organization can use to improve your budgeting processes and results.
One such system is a modern FP&A solution. These solutions create and support a budgeting and forecasting process that is more efficient with shared ownership that reduces risk and uncertainty.
Here are a few of the biggest reasons why modern FP&A can help your organization rethink its approach to the traditional budgeting process.
- Increased Ownership
Traditional budgeting hits speed bumps most often when ownership of a task is hazy. Most budget managers have experienced this—having to reconcile data between spreadsheets from different sources, and then manually enter information.
This method can be a recipe for disaster. A better solution? Create a system where every party has ownership and responsibility for their part of the budget and data gets consolidated automatically.
- Knowing Actuals and Cash Flow
Many businesses fail not because they’re bad ideas, but because they don’t have a good handle on cash flow. Real-time cash flow is a vital piece of information that can get swallowed by all the other numbers, or worse, left out of reporting entirely.
Knowing current performance and cash flow is crucial. Otherwise, it becomes increasingly difficult to feel confident in making big decisions that involve significant cash outlays. Holding off on something that can improve the organization, or conversely, spending when cash is limited can cause potential problems as well.
- Real-Time Reporting
Today’s business environment is dynamic. Management teams and key decision makers need to spot both challenges and opportunities and act on them quickly. Making these quick decisions is far more challenging without on-demand access to actual data.
One significant benefit of modern FP&A is real-time reporting at the click of a button. Decision makers can see a snapshot of organizational health at a moment’s notice.
- Easy-to-Understand Presentations
A pitfall of budgeting is finding the right amount of detail. Too much, and key decision makers will get mired in data that doesn’t drive performance. Too little, and they could be missing information behind those key drivers that impact the business.
Being able to highlight key performance indicators in easy-to-read dashboards can make all the difference. The management team can see what data matters now and compare it to historical numbers and future projections. The ability to see the right data at the right time is essential to confidently, successfully setting organizational strategy for the future.
- Improved Forecasting
It’s difficult to create a good forecast if the data behind it is shaky or out of date. Today, organizations look to implement rolling forecasts (among others) as a key component of their budgeting cycle.
Good financial forecasts can help your organization project production and staffing, reduce spending and plan for the future. They can also identify potential needs down the road and help guide organizational strategy. So it’s crucial to make your system both more effective and efficient.
Having a very clear understanding of your organization’s overall health is incredibly important for strategic decision making. It’s why taking control of your budget is so crucial, and with modern FP&A, it’s easier now than ever before.
Centage provides modern FP&A software solutions that empower Finance teams to lead the way to a stronger, more agile business. Our cloud platform, Planning Maestro, makes sophisticated budgeting, planning, and forecasting easy and accessible. Intuitive automation accelerates workflows and improves accuracy, enabling Finance leaders to deliver reliable information and meaningful insights at the speed of today’s business. For more information on how to modernize your FP&A process, view our product demonstration video, or call 800-366-5111.