Updated: Feb 24, 2019
"A budget is more than just a series of numbers on a page; it is an embodiment of our values" - Barack Obama
We all know how important budgets and the budgeting process are. We also know how long and tiring the process can be. Not only are budgets a financial plan for the upcoming year’s financial objectives, but they have the responsibility to align to business strategies and objectives which extend beyond the finance department’s borders.
Companies approach budgeting with varying levels of respect. For some the process is driven largely by the finance team, and for others, input and accountability is spread across all departments/divisions. However, majority of the time, responsibility rests with the finance team to manage and bring the process together for the Executive Team. So how can finance teams have a budgeting process which is efficient, accurate and suitable?
1. Aligning Budgets with Business Plans/Strategies
For budgets to truly align to business strategies, they need to incorporate and anticipate upcoming business short term and long term goals such as ‘sales, marketing, and operational planning – all aligned with the company’s strategic vision’. However, the increasing complexity of business structures and siloed departments  have made it increasingly difficult for finance teams to consider data outside their division and incorporate business plans and strategies.
Having data available via a singular unified platform gives finance teams a much better point of view to start their budgeting process. By and providing a ‘single version of the truth’, finance teams can consider a wider set of information, and create a budget which fully encapsulates not only the financial information, but also the business processes and purposes. Thus, resolving issues of budget-strategy alignment.
2. Automating Manual Processes
Wasting time on manual data input and processing means that there’s a lack of productivity. It also means that finance teams are losing precious time and money on automatable processes, and losing time to analyse or respond to any challenges. Additionally, the general process by finance teams of issuing templates in the form of a P&L based on historical data, takes time to compile, whereas a systems approach can facilitate median results based on multiple years, which can better identify historical trends.
Implementing an automated system allows finance teams to spend significantly less time on manual rolling of data, and focus on budgeting. Budgeting takes long enough already; employing a systemised approach, reduces time wasted, leading to a more efficient process.
3. Modelling Changes
One of the biggest disruptors to the budget process is input form the executive to request modelling and scenario changes. This can lead to extensive re-working of (multiple) spreadsheets, which is time consuming and can lead to human errors.
With a systemised approach, re-modelling of the budget is simplified as the data sits within the software. So any changes can be drawn directly from the source system data. Different versions of the budget can also be modelled (i.e. for Scenario planning) more easily, and immediately available for collaborative input from other departments or divisions, online.
We will be talking more about how applying a systematic approach can benefit budgeting in our next blog post released on the 25th Feb! If you would like to enquire about any of these points in detail, contact us at www.oyb.com.au
UPDATE: Part 2 has been released. Click here to read the blog post now.