Budgeting is perhaps the most dreaded aspect of operating a business. Between the painstaking process of developing the budget, the wrangling over monetary allocation, and the challenges of accurately projecting future revenues and costs, budgeting is a tedious and consuming process that many businesses find exacerbating.
Fortunately, your company doesn't have to suffer. There are some easy tactics to streamline the budget cycle, improving both the efficiency and accuracy of the process.
Figure Out What's Driving Your Business
Identify the core factors that are driving your business, so you can prioritize resource allocation to support your primary business goals. Analyzing and assessing the drivers of success will enable you to create budgets in a way that support your core business functions and promote the future financial success of your business.
Stop Relying on Excel
If your company is still relying primarily on Excel, then you've just identified a key source of your headaches. According to a recent poll, about 49 percent of enterprises are primarily utilizing Excel for their budget cycle, despite the inefficiencies and inaccuracies it presents. Excel relies wholly on manual data entry, which is notoriously inaccurate and tedious. Not only will it drastically increase the length of your budget cycle, but it decreases the accuracy of the numbers. If your business hopes to implement a streamlined budget cycle, eliminating Excel is the first step.
Start Leveraging the Cloud
With the cloud, you can integrate financial and operational data into one place, providing you with a single source of truth that will improve the accuracy of analysis and forecasting. With cloud-based software, you can also avoid the installation and management costs associated with on-premises solutions. It will enable you to leverage data more effectively, thus facilitating the budget cycle with greater accuracy and efficiency.
Implement Rolling Forecasts
Rolling forecasts are perhaps the greatest tool at your disposal for reducing dependency on the annual budget, while improving the accuracy of planning. A rolling forecast will enable your team to revisit and update planning assumptions periodically, providing the agility needed to respond quickly to industry or economic fluctuations.
Automate as Much as Possible
Automation is efficiency in action. By automating tasks, you can conquer more work in less time, thus greatly streamlining the budget cycle. An additional perk is improved accuracy. With task automation, you'll reduce the human errors associated with manual data entry, thus improving the reliability of your results.
Create a Routine
The key to optimizing the budget cycle is by getting your team into a set routine. Establish specific roles for each team member and ensure they're well-versed in their particular duties. Create timelines for your team to perpetually meet, so no aspect of the budget cycle is neglected. With a set routine in place, your team can develop a rhythm for conquering the budget cycle efficiently, while still prioritizing accuracy.
Improve Planning and Forecasting with Enterprise Performance Management
Enterprise performance management (EPM) software will provide your team with the tools they need to streamline the budget cycle and improve forecasting accuracy. It will decrease your reliance on Excel, providing you with a cloud-based platform to leverage data, improve analysis, and facilitate rolling forecasts.
To learn more, read the whitepaper, Financial Planning and Forecasting Best Practices.