budgeting software Archives

Can You Easily Perform Multiple Budget Iterations?

January 30, 2020 By Alan Hart, Centage Guest Blog Author, Principal Consultant at Pacific Shine Group

Learn to take advantage of your FP&A software’s capabilities to generate multiple budget iterations.

I am surprised to hear that many people who use the world’s most popular business software application, MS-Excel, are not aware of the existence of a useful function called “Solver”, found in the Analysis group in the Data tab after the Solver Ad-in has been enabled in Excel. This Ad-in was developed by Frontline Systems, Inc. (https://www.solver.com/).

The basic Solver is offered to all Excel users and there is a premium version, recently renamed “Analytic Solver^® Optimization”, which includes additional data mining and analysis tools, available for licensing directly from Frontline Systems.

A good example that demonstrates how Solver is applied in a manufacturing environment is the common problem of attempting to maximize gross profit given availability of material, resources (both machines and people) and having specific constraints. Using this information, Solver can tell us what products to produce, assuming we can sell them, and in what quantities in order to achieve our goal of maximizing our gross profit for the period.

Solver is able to do that by performing many iterations of the basic calculation using different values and staying within the identified constraints, ultimately optimizing the model and delivering the data required to make decisions.

The benefit here is obtained through the use of a computer and software (the built-in Excel Solver or the premium version) that performs an untold number of calculations that would be impossible to do manually.

Borrowing from the Solver example I was thinking about what it would be like to be able to perform many iterations of the corporate budget in order to optimize it and align it to certain goals contemplated by management.

Another good analogy is the use of spreadsheets to recalculate the entire workbook or individual worksheets when values in one or more cells are changed and the results observed. This allows for quick, “what-if” analysis of several or many scenarios, relying on the computer to almost instantly give us new answers. Then each scenario’s results can be individually saved.

What if we could use the same principles when preparing a corporate budget in a purpose designed planning, budgeting and analysis solution? Shouldn’t we be allowed to use a base budget and make certain changes to inputs such as drivers or assumptions and have the software regenerate the entire budget under a separate version and present the results for analysis? What about having different business units submit multiple budgets of their business units (e.g., departments) and have the software automatically generate a unique version of the base budget?

Finally, wouldn’t it be nice to have each of these budget versions automatically generate a full set of financial statements and other reports, and have the financial statements (Income Statement, Balance Sheet and Statement of Cash Flows) always synchronized to the underlying versions of the budget?

Being able to automate the versioning of the budget and perform several (or even many) iterations of the budget automatically and effortlessly is something that can only encourage management to insist on having the budget optimized and aligned with the business goals.

Using a manual process with exclusive use of spreadsheets in the budget process, or using one of several purpose-designed software solutions where making changes to the budget is a time consuming, error prone and complex endeavor, is guaranteed to discourage finance management from performing the desired budget iterations, settling on one or two versions instead of many more that could be useful in arriving at the optimal budget.

This is a common flaw in the budget preparation process and usually stems from the inability to quickly generate several or more versions based on different scenarios. This often results in the creation of a final budget that may not be realistic or even achievable and will cause large variances of actuals vs. budget numbers.

No matter how sophisticated your budget process and tools are, you will encounter variances; this is completely normal and expected. What is not acceptable is reliance on a deficient process or inadequate tools, especially at a time where planning and budgeting tools, featuring Intelligent Planning technology are available even to smaller enterprises.

With Intelligent Planning there is a set of tools specifically designed to improve automation (by use of built-in business logic and accounting rules) and collaboration, thus delivering forecasted financial statements that are an extension of actual accounting financial statements.

Intelligent Planning provides the ability to quickly and effortlessly generate multiple versions of the budget, affording management the capability of analyzing and optimizing the budget to meet planning and business goals.

While the technology is relatively new, it has already found its way into many SMBs (Small and Medium size Businesses) who realize the importance of optimizing the budget through multiple iterations and analyses while always keeping financial reports and statements in perfect synchronization with the various budget versions. I expect this to be the new standard in this software category and become an indispensable feature in all FP&A software solutions.

Alan Hart – Bio

Alan Hart, MBA, is Principal Consultant at Pacific Shine Group in Portland, Oregon, with responsibility for client business development and hands-on client project implementations. Prior to starting Pacific Shine Group, he worked in various executive accounting and finance positions with technology and growth companies. Notable is his 18 years in the hi-tech manufacturing industry where he served as Controller, Vice President of Finance and CFO of several privately as well as publicly held companies in the Hi-Tech industry, such as Hybrid Arts, Inc., Hamilton Bay Associates and Syncronys Software. In his role in management consulting, Alan has worked in diverse industries and with a variety of clients, including fortune 1000 companies such as Boeing, Delta Airlines, Intel, Wyndham Worldwide and others, as well as many mid-market organizations such as Guitar Center, Ducommun AeroStructures, Cypress Semiconductor, TriQuint Semiconductor and others.

Combining his skills and experience in engineering with deep understanding of technical accounting, he is able to assist small and medium-size manufacturing companies establish GAAP compliant accounting and reporting systems.

The Importance of Planning and Budgeting Alignment

September 11, 2018 By Kory Wagner, Vice President, Marketing & Demand Generation

Few companies open their doors with the intent of staying the same size, or doing the same thing, for the life of the organization. Even the smallest business has a vision for the future of the company.

Companies also have a finite number of resources they can apply to running and growing the organization. Budgeting is a critical part of making sure you have what you need to operate and that you intelligently allocate funds for growth.

Unfortunately, some companies lose the connection between planning and budgeting along the way. While they understand that the two are intertwined, it isn’t uncommon for a company’s budget to be set up at odds with its strategy. Aligning planning and budget are crucial to achieving your company’s goals.

Why Planning and Budget Should be Aligned

Your strategic plan is the vision of where you want your company to go. It’s aspirational, but not unrealistic. A well thought out plan will tell you where you’re going and lay the groundwork for how you’ll get there.

Your business budget should guide you in setting up your resources to execute on that vision. It ensures that the things you need – personnel, investments, equipment, and so forth – are available to get you to wherever you plan on going.

It’s easy to get caught up during the budget process in ensuring that money is allocated for operations and smaller projects that don’t feed into the larger plan. It’s also easy to set a plan in place that tries to do everything at once and falls short because of lack of resources. Ensuring these two are aligned is how an organization achieves its vision.

Setting Your Budget to Support Your Corporate Strategy

Getting your budget to support your corporate vision can be easier said than done. There are three keys to getting both of these important business functions moving together in the same direction.

Keep Your Eye on the Ball

Many business plans span over much more than 12 months. And many budgets look at a 12-month period. While there are several ways to adjust this (including rolling budgets, discussed below), those organizations that keep to an annual budget need to include these long-term plans into the budgeting process early, before all funds are allocated to operational endeavors and shorter-term projects that don’t move the company toward its end goal.

Transparency

For some organizations, the team that sets the strategic plan is not the same group that defines the nitty gritty details of the budget. It’s impossible for the finance team to support the larger business plan if they don’t know what it is. Executives need to communicate the business’s goals to the directors and managers creating the budgets so that resources are appropriately applied to the right strategic projects at the right time.

Review, Measure, and Adjust

Today’s business world changes, rapidly. Not only do organizations need to measure their strategic progress against their defined goals, but they need to ensure that those same plans aren’t out pacing the actual budget. A dip in sales, an issue with suppliers, any number of problems can throw a wrench into the most well laid plans. A rolling budget, as opposed to an annual one, can help organizations adjust quickly to meet new business demands while still staying on the planned path. By looking at budgets monthly or quarterly, deviations from the original budget can be made quickly, keeping the organization agile while still reaching its goals.

Planning and budgeting are both important to the stability and growth of a company. But they don’t exist in a vacuum. These two pieces must be closely aligned and reviewed both separately and together for a company to successfully reach the next level in its growth.

See how you can build a driver-based budget model in days. Test multiple scenarios, generate accurate and automated forecasts, and enforce your chart of accounts.

Centage Corporation’s Planning Maestro is a cloud-native planning & analytics platform that delivers year-round financial intelligence. With Planning Maestro, Centage offers the sophisticated features needed by small and mid-market organizations to integrate budgeting, forecasting, and deep data analysis within one easy-to-use, scalable SaaS solution. For more information on how to modernize your office of finance with intelligent planning, view our product demonstration video, or call 800-366-5111.

Meet the Maestros: One on One with Centage CPO Ed Gromann

September 4, 2018 By Ed Gromann, Chief of Staff and Strategic Initiatives

Welcome to Centage’s blog series, Meet the Maestros. In these posts, we give you the opportunity to get to know some of the team at Centage who are working to make budgeting and forecasting easier and more accurate for small to medium size companies.

In this issue, we’ve gathered insights from Centage’s Chief Products Officer, Ed Gromann.

What does advocating for the customer mean at Centage?

“Customers are the life force of any business,” says Ed. He’s clear on how important customers and the customer experience is to Centage, and to him. “We continually strive to improve our user experience through a variety of touchpoints, including phone support, health-checks and on-site meetings, just to name a few.” Ed believes in the importance of the voice of the customer so much, he makes sure to participate in gathering this important feedback directly by periodically participating in customer implementations. It goes beyond ensuring Centage is delivering success to their customers. “These on-site engagements serve another purpose: It allows me to observe the customer’s reaction to new features and functions and solicit their opinion for improvement. It becomes a personal focus group.”

What are small to medium businesses looking for in FP&A software?

Many of the organizations that come to Centage have been, until then, using Excel for planning and budgeting. Ed explains that “Although this solution works OK for a short period of time, it inevitably becomes convoluted and painful.” When companies turn to Centage, they want to improve their processes, which have become overly complicated. “We streamline the process,” Ed says, “ensure GAAP compliance and give people back time to do more value-added activities, such as proactive analysis.”

How has data visualization changed and grown in the industry, and where is it headed?

“Data visualization has always been around,” Ed states. However, recent improvements have made visualizations more accessible. “Products such as Microsoft Power BI, transform data into beautiful graphical representations,” Ed explains. But it won’t stop there. Ed continues, “I believe it will continue to improve, making it easier to bring in a variety of data sources and see the results in a visual fashion. Ultimately, the interpretation of the data will become increasingly intuitive.”

With experts like Ed Gromann as part of our team, it’s no wonder that organizations of every size rely on Centage Corporation’s Maestro Suite of solutions which includes Budget Maestro™ to help them make budgeting and forecasting easier and more accurate. Budget Maestro improves the efficiency and effectiveness of business budgeting and planning, financial forecasting, financial consolidation and reporting processes. For more information, take a tour of Budget Maestro, contact Centage, or call 800-366-5111 now.

An Open Door – Where Security Falls Short with Excel Budgets

June 26, 2018 By Jason Lin, Chief Financial Officer

Using Excel for financial functions is on the decline, per the 2018 Benchmarking the Accounting and Finance Function report conducted by the Financial Executives Research Foundation.

Many companies moving off Excel cite the need for better collaborative tools and the need to be able to handle larger and larger data sets.

Another significant area where Excel falls short? Security. While the other issues can cause productivity slowdowns, the lack of security features in Excel can mean data getting into the wrong hands, or worse, lead to lawsuits because of unprotected data.

Not Intended for Security

Excel has a few features that allow a user to limit access to others. Things like file level password protection, workbook level protections and even worksheet level limitations are intended to prevent users other than the document’s creator to perform certain actions, such as adding or deleting cells, rows or columns or even changing data within a sheet.

Yet even Microsoft warns that these tools are not intended as security features, warning that you should not assume that the information in your spreadsheet is secure.

Where Excel Falls Short

When it comes to budget and financial planning, there are minimum features that organizations should utilize to protect their sensitive information. These features go far beyond simple file level password protection.

Probably the biggest threat to data stored in Excel is the lack of individual user access controls. When an Excel spreadsheet is password protected, it is given a single password for all users. If you have the spreadsheet and the password, you have access to all the data within.

Therefore, to have different departments collaborate on an organization’s budget, you have two options: create multiple spreadsheets or expose data to everyone.

Creating multiple spreadsheets means dividing the spreadsheet up and then spending valuable time re-combining sheets, importing data, and checking and re-checking to ensure the data and formulas are correct. After all of this, there is still no guarantee that data integrity has been maintained.

It isn’t just about your employees seeing data they shouldn’t. A spreadsheet containing all of your company’s financial data, falling into the wrong hands, can be easily compromised even with password protection.

Even utilizing the protections Excel does offer, those can be easily defeated. Opening an Excel spreadsheet in other spreadsheet programs removes some of the protections that can be added, like hidden sheets and locked cells and rows.

Excel works best, and is most secure, as a single user tool. Once you begin sharing, you open your data and ultimately your organization to significant risks.

Protecting your budgeting and planning data is paramount to success. When creating and storing business-critical data, organizations of every description rely on the Budget Maestro™ family of software solutions by Centage Corporation to improve the efficiency and effectiveness of their business budgeting and planning, financial forecasting, financial consolidation and reporting processes. For more information, take a tour of Budget Maestro, contact Centage, or call 800-366-5111 now

IT Budgeting and Asset Depreciation for IT Professionals

March 8, 2018 By Felix Gorovodsky

When it comes to IT Budgeting and the current assets in your organization (i.e. computers, software etc.), it’s usually a challenge for IT Professionals to work alongside the accounting department. In many cases IT Professionals don’t have experience or expertise in IT Asset Depreciation. Yes! Asset Depreciation, you might be scratching your head wondering why do I care about depreciation? It’s very simple. All IT equipment: laptops, desktops, monitors, printers, peripherals and other items lose value over time.

Understanding how depreciation is calculated is very time consuming and difficult if you are not familiar with accounting principles. Many of my colleagues in the IT sector that I have collaborated with attempt to avoid asset depreciation all together and seek the look to the accounting team for help. Since starting at Centage Corporation, a provider of SaaS-based budgeting, forecasting, reporting and analytics tools, I have taken advantage of the Asset Module within our flagship product Planning Maestro, to calculate the depreciation of our IT equipment.

With Planning Maestro, it’s incredibly simple because of the financial logic that is built into the tool. All I need to do is plug in a few fields – such as department, cost, date equipment went into use, etc. –manually or by an Excel import template.

Within the tool you can set up how many of the same computers did I buy this time? How much was each computer? When did I buy them versus when did I put them into service? Maybe I’m building a new cluster of servers but they won’t be online for 60 days. Do I use a 3-year, or 5-year depreciation? Knowing how to properly depreciate the equipment is essential to the organizations capital budget, but also its operating costs.

I love to use Spiceworks Helpdesk which offers an add-in tool that scans your network to collect data on the equipment that is on our network. I have a simple report that can be exported with model and serial numbers, effective date, predicted cost of equipment when it went in to the environment, and the user assigned to the equipment. I then easily import the data into Planning Maestro.

To calculate the depreciation in sync with the capital budget, your IT Department simply needs to make sure the cost of the equipment and effective dates are accurate in Spiceworks for the report to import properly into Planning Maestro.

Understanding, your IT Budget is an extremely important aspect of operating a business today. From the recent State of IT report, published by Spiceworks, Inc, more than 31% of the 2018 Budget will be allocated to hardware and peripherals, and 21% on hosted/cloud services. This is an increase of 52% from 2017. The reason: a need for new equipment, whether its old and outdated or damaged from general usage. The need to manage the assets you are responsible for and doing it the best way needs to be added as a task in 2018. This data will provide the proper impact to your company’s budget and especially provide validation for additional requests for equipment as the need changes not only for 2018 but ongoing into the future.

Within the capital budget, what IT department wants to lose funding for that fiscal year? Without the proper documentation in place there may be a need to have equipment rendered obsolete. Without proper documentation you may be losing an opportunity because you may not know certain equipment can be properly swapped out in a 3-year timespan and not a 5-year.

If your company currently use’s Planning Maestro or you have used it at another company you may already know the benefits of the Asset module. However, if you are not familiar with its existence or want more info on how to use it please don’t hesitate to contact your Account Manager to learn more. If you are interested in learning more about Budget please don’t hesitate to contact our Sales Team at Sales@Centage.com and schedule a demo to see the product in action.

Why intelligent planning?