We are well into 2017 now and that means many corporations are either happy to see the year-end budgeting and forecasting process done and over with, are still grappling with the changes required after review, or (if you’ve jumped on the rolling forecast bandwagon) are continually working on improving the process altogether. Whatever camp you fall into, the budgeting and forecasting process takes thought – and being the most efficient means adapting to change. The budgeting and forecasting process is evolving – are you evolving with it?

These are some of the biggest mistakes companies make when it comes the budgeting and forecasting process, and how to solve them:

1. Everyone seems to forget the fact that no one likes budgeting. It is stressful and time consuming. The average contributor gets very little from the process – they spend considerable time inputting data, only to submit it and sit with the knowledge that those numbers may be rejected and then they’ll have to go back and do more work. Or worse, they’ll be held accountable (which should be the case) and if the numbers don’t end up working out they’ll have to face the music. Remembering that no one likes budgeting and catering your process with this knowledge in mind can make the whole process far less stressful.
2. We talked about accountability. If there is no accountability for the people submitting the budget, the process loses some of its importance in their minds. When a contributor doesn’t see the purpose, or grasp the significance, they may not be as thorough or diligent (sounds cynical, but it’s true). However, if the contributors are held accountable for the numbers they submit, either in terms of performance review or allowable spending, they will be far more likely to put more effort in. That being said, you should keep in mind that those being held accountable should be the only ones who can alter the numbers – if those numbers are changed without their knowledge or consent they may lose faith in the process.
3. Not challenging the numbers. We talk about accountability, and that means a certain level of trust in those numbers, but if you are not challenging or at least critically questioning the numbers, you can’t then turn around and place blame solely on the heads of those inputting numbers. Review carefully, and if changes are required, be sure to make contributors aware of why.
4. Not providing enough time to get the job done. There are only so many hours in the day. If a user wants to input accurate numbers, but doesn’t have time, then the end result may be rushed and this will inevitably reduce the quality of the end product. You need to give people enough time if you want a quality budget. You do this by either increasing the time it takes to submit the budget or by reducing their other tasks during the budget cycle. This will also significantly reduce their stress over the entire process.
5. Leaving everything to the last minute. This is a big one. So many companies continue to buck the trend of moving to rolling forecasts and stick to budgeting only once a year. This is one of the biggest reasons contributors stress about the process. When you operate with an annual budget, you are only providing a finite period of time to compile 12 months of data and forecasting – that’s a ton of data collection. However, with a rolling forecast, that data collection and analysis is spread over the year, making the process far smoother and leaving room to adapt to changing conditions as they arise, rather than having to deal with as them as a whole at year-end.

At True Sky, we can help you simplify your Excel-based budgeting and forecasting process to deal with many of these mistakes. Stop stressing. Find out more by visiting www.truesky.com today.