Throughout the decades, organizations have changed the way they do business. At certain points, decentralized operations were popular. At others, centralized operations were seen as the better choice.
Today, companies use both methods to manage their operations, from procurement to budgeting. While decentralized budgeting can work well for certain companies, centralizing your budgeting process can also offer real benefits.
How do you know if centralized budgeting is right for your company?
Centralized budgeting won’t be right for everyone. If your company is multinational, for example, or your budget relies greatly on information that is mainly held by lower-level employees, centralized budgeting can be a drag on your operational efficiency.
However, there are plenty of companies that have multiple departments and decision-makers for which centralized budgeting is a good fit. Deciding whether or not it’s right for your organization is a matter of looking at how it will affect your budgeting process: will it make the process simpler, or more complex? Will it mean less need for back-and-forth with different department heads, or more?
Benefit #1: Reduced redundancy
When your budget is centralized in the office of the CFO, employees spend less time putting in redundant information.
Instead of working on separate spreadsheets that are housed in different departments, and only merged toward the end of the budget process, everyone can access the single version of the budget and make changes in real time.
This is how True Sky works. Users can log in to True Sky, add or change their numbers, and be done. If someone has already put in a specific piece of information, it’s immediately visible. Redundancies virtually disappear.
Benefit #2: CFO has greater control
When the budget process is managed through the office of the CFO, the CFO can maintain greater control over who has access to the budget.
This maintains efficiency by allowing other employees to continue to input data and make changes directly, while still ensuring that the CFO has the ability to track and monitor the budget’s development. This also means fewer surprises for everyone, not just at the executive level, but below as well.
Benefit #3: Greater security
With a centralized system like True Sky, which has features like audit trails, permissions, and approval flows, organizations can know that their data is highly secure.
This doesn’t just mean security from external threats. Having a single budget document that is accessible to everyone who needs access, and no one else, means that there are more eyes on the document to notice inaccuracies, omissions, or suspicious changes.
Department heads, accountants, and other users can then address these issues when they see them, rather than waiting until the very end of the budget process when they see all the data together for the first time.
Benefit #4: Gain a big picture view of your organization
When your budgeting is centralized and being updated in real time, you gain the advantage of having an always-current big picture view of how your company is doing.
This can be beneficial for everyone involved in the budgeting process, not just the CFO. Instead of getting stuck in the weeds, and being unable to see how the details fit together, a centralized budget allows employees to see how the changes they make affect the rest of the company’s finances.
This is especially true with True Sky. True Sky allows users to run “What if” scenarios to test out how certain changes would affect the rest of the budget.
Benefit #5: Manage multiple budgets with consistency
If you have multiple budgets to manage, a centralized budget can help you ensure consistency throughout them all.
This could be as simple as maintaining the right formatting in each spreadsheet, or it could be as complex as ensuring that the correct tax laws are taken into account by each branch of your company.
Centralized budgeting can offer many benefits to companies of all shapes and sizes. Learn more about how True Sky can help your company here.