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Accounting Budgeting Best Practices

Want Full Control of Your Budgeting Process?

4 Tips For Improving The Budgeting Process

Take Control of Your Budgeting Process

 

For a majority of businesses, Excel is the basic budgeting tool used. Subsequently, the Excel interface significantly influences the way the budgeting process works.

The Typical Budgeting Cycle

About 4 months before the final budget is due, you begin your budget cycle. Sound familiar? You’re not alone. We’ve found that budget teams are spending way too much time on this task and that the majority of the time is dedicated to coming up with some sort of budget input template.

These templates are most often created in Excel. An Excel workbook is created for each individual, location, and department. In this way, security and population of data is managed. The endless hours allocated to the creation of these templates consume a major part of the budgeting cycle.

Once the templates are finished, they are typically given to end users to fill out, however, it often takes quite a bit of time to get the budget input done. The annual budget is not a popular topic in any industry, and the process takes a tremendous amount of time when normal work needs to be done. Moreover, the design of the template is a crucial factor in slowing data input. Even when input of the data is complete, there is the enormous task of combining all the information onto one master worksheet.

Making this merge into one master spread sheet can be difficult as individual users will have made changes to the template – deleting a row, or altering a formula, or typing text where it shouldn’t be. As a result the linkages that had been laboriously created initially are broken.

Finally, after the merging is complete, there is the review process where specific numbers are examined – this can drag on even while attempting to finalize the budget. While senior management is waiting for the completion of the budget, in the rush to make the deadline, many errors often get overlooked.

How To Take Back The Budgeting Process, Making It Smoother And More Productive

1. Provide Realistic Timelines. Managers should always remember this golden rule: No one enjoys budgeting. Employees lose time that could be devoted to regular duties, since their time must be devoted to budgeting. Keep in mind that end users consider budgeting a burden. By considering the end user’s sanity while building the budgeting process will facilitate a faster process and better numbers.

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2. Tailor the systems and processes to individuals. Every individual will have a different comfort zone. For example, using templates that the accounting team is comfortable with might not yield the same results for a sales manager. By ensuring that the relevant documents are comprehensible and transparent to users, it can go a long way to obtain better data and ease the burden during the budgeting process.

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3. Free sharing of information and collaboration. United we stand and divided we fall. The budgeting process is no different, collaboration with your colleagues will greatly improve efficiency and creates better numbers.

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4. Use an application to streamline the process. Excel is an excellent tool, but as you increase the number of users, it may become more difficult. By implementing a different solution for data generation and input, it can dramatically improve the budget cycle.

Because the budgeting process isn’t something that users are involved with on a daily basis, it is a process that can undergo significant alteration. However, to ensure end users are comfortable with the budget system, implementation should be done in strategic stages. Each company has to work out the solution that best fits their culture and structure. Unfortunately, there is no one-sized fit all solution.

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Ready to take control of the budgeting process? True Sky has the knowledge and experience to help you with your budgeting, planning and forecasting needs.

Register for a FREE True Sky webinar and see how our CPM solution can help you take back control of your budgeting process!

 

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