The business budgeting process. It’s something every business has to do, yet many struggle.
More often than not, managers and CFOs get bombarded with multiple meetings, data sets and wait times before the process even begins. That’s not even counting the endless man hours put into creating spreadsheets.
Is it any wonder so many get frustrated?
According to a 2015 study from Grant Thornton LLP and the American Productivity and Quality Center (APQC), the budgeting process is a major source of dissatisfaction among budgeting managers and CFOs.
These numbers tell quite a story:
- A whopping 83 percent of CFOs think their organization’s approach to annual business budgeting needs to be optimized.
- 62 percent say their staff is too buried in basic financial management to improve financial planning and analysis.
- Only 37 percent of CFOs and finance leaders say their organization’s approach to annual budgeting is valuable, and, of those, all think it needs improvement.
It’s clear CFOs and budgeting managers want to improve the process, however, many struggle with how to do it in a way that’s both efficient and accurate.
The good news is there are ways to optimize business budgeting through technology—which means you don’t have to follow the old process anymore. Follow the three steps I detail below, and your business will see a marked improvement in the budgeting process.
Centralize and Consolidate Data
After ten meetings between department managers and a month of data entry into spreadsheets, the budget is almost ready. You’ve been waiting two weeks for someone in IT to provide you with the final file.
To many budget managers and CFOs, this process could describe their current system of developing the business budget to a tee.
One of the most-cited reasons why budgeting can take so long is because there are too many people and departments involved, and, in many instances, only one person can work on the budget at a time. That means everyone else must wait their turn. Couple that with endless meetings going over data and it shouldn’t be any wonder why the budget process can take months.
Avoid all of the wait and headaches by working to centralize and consolidate your data. There are a number of desktop and cloud-based business budgeting tools that streamline this process and allow every stakeholder in the budgeting process access to the data at the touch of a button, which then reduces both wait times and meetings.
Because of technological advancements, there is now more data available than ever. Your business could dig deep into all sorts of numbers to discover trends, opportunities and potential risks. However, many businesses aren’t fully capitalizing on the potential because they don’t have adequate tools.
Oftentimes, because the budgeting process can take months, the final budget numbers, when produced at last, are already outdated. Outdated information can lead to poor forecasting, missing quarterly and yearly marks, and the increased risk of making poor decisions based on inaccurate data.
Instead of using this outdated method, look to real-time data to help managers and CFOs make informed decisions. Real-time data can not only be accurately compared to historical trends at any moment, it can also be used for rolling forecasts throughout the year.
Incorporating real-time data into the budgeting process enables organizations to have an accurate snapshot of the overall financial health of the company to then make optimal strategic decisions.
Reduce Manual Errors
Too many businesses are still relying on Excel spreadsheets as their main tool for their budgeting process. While Excel can work for the basics, it can become a beast when trying to incorporate multiple streams of information and analysis.
Then there is the big problem that comes with spreadsheets: they are highly susceptible to manual errors. Since data has to be keyed in from various sources, both online and off, it’s not rare to have a handful of incorrect numbers, which can dramatically impact reporting.
The potential for manual errors magnifies as the spreadsheet is passed around from department to department to be updated and analyzed.
Since it is incredibly difficult to track every entry or edit made by users, finding the source (or reasoning) behind the numbers means there is low data security.
These errors can be reduced by avoiding spreadsheets altogether. Instead, look to a business budgeting software solution that automatically consolidates data, performs calculations and generates reports, while tracking users.
Use these three steps to optimize the budgeting process, speed up workflows and improve the bottom line.
Businesses 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.