All organizations, whether formally or informally, budget in some form or another. The type of business budgeting you conduct likely depends on a number of different factors, but have you ever stopped to ask why you even bother with it? After all, budgeting takes time and energy and can be a pain – for all involved. And if this budget information is not used in a meaningful way then all that pain is for nothing.
Perhaps you’re thinking we’ve lost our minds and are suggesting you forego the budget in exchange for your sanity. While that may seem like a utopian ideal, it isn’t what we’re recommending – far from it. Most companies carefully plan and review their finances by identifying, measuring, analyzing and reporting their financial information. What we’re saying is that, if you’re looking to improve your business budgeting process, asking why is a great place to start.
For example, if you budget just to budget, without understanding why you do so, those budgets will never actually provide you with the business intelligence you need to be able to make the most informed decisions. Yes, the information may be contained within, but if you are not really sure why it is included, it is meaningless, and thus holds no intrinsic value. Asking what purpose the numbers serve is a great way to determine what information is needed when, and by whom.
Doing a budget just to budget can also be a waste of time. If your individual departments are crunching the numbers and filling in the boxes, but the boxes are not relevant to their department, the process becomes time consuming with no benefit. When you carefully plan your budget, including the necessary requirements for each contributor, that time spent entering in values that aren’t actually required is saved.
When your budget is created to inform those in need-to-know positions, with well-thought out explanations, budgeting and forecasting becomes easier and inherently more valuable.
What’s more, if you feel like your budgeting process has become overwhelming, if it takes longer than you think, or if it involves far too many spreadsheets or errors, perhaps it is time to do a little housekeeping and consider automating as much of the process as possible.
The business budgeting process is essential, there is no denying that. It is critical for the overall financial well-being of your business. That being said, it doesn’t need to be painful.
True Sky can help you regain control of your business budgeting process. Find out more by visiting www.truesky.com today.