6 signs you need budgeting software

Spreadsheets are still the backbone of the budgeting process for many organizations. And while they have some obvious advantages—they’re everywhere and relatively easy to use—they shouldn’t be considered the end-all-be-all of budgeting software for business. If you’re not already using budgeting software, you’ve probably run into some serious problems that signal your need for one.

But if you need help reading the signs, we have you covered.

What is business budgeting software?

Simply put, business budgeting software is any budgeting software that’s designed specifically for businesses. These platforms can take many forms, with a wide range of features, but a focus on budgeting should be at their core.

For instance, while many organizations may start using free or low-cost options like Quickbooks and Freshbooks, they rarely scale with your organization. Soon, you’ll find yourself spending more time fixing the problems they create than the time you saved by adopting them in the first place.

The 6 signs your business needs budgeting software

1. Budgeting takes months

In many organizations, annual budgeting can take anywhere from 25 days to nearly two months. If that timeline sounds short to you, that’s a strong signal that your current budgeting software for business isn’t cutting it.

Budgeting is a time- and resource-intensive process, even for SMBs with straightforward organizational structures. Add in subsidiaries, groups, and LLCs, and consolidating all the information you need can take weeks. Finalizing your budget can easily stretch to a full quarter in these circumstances, which makes it difficult to adapt to changing market conditions.

Business budgeting software tip

At the very least, your budgeting software shouldn’t make it longer to wrap up your annual budget. But beyond that, it should break you out of a rigid, fixed annual budgeting process. Using a Financial Performance Platform like Prophix can give you a steady stream of financial data, essential for preparing budgets more quickly and adapting them as needed.

2. Your budget isn’t flexible

If you work in finance, you’re likely familiar with the following scenario:

You’ve just finished preparing your company’s annual budget when something significant changes and you need to make revisions. If you’re using spreadsheets as your budgeting tool, making these revisions can be a manual and time-consuming process that is susceptible to data entry errors, broken formulas, and other problems.

Companies that have adopted budgeting software for business, such as Financial Performance Management (FPM) software, can react to changes within and external to the business, such as fluctuations in cash flow, price changes, product line changes, shifting capital allocations, and organizational changes.

Building nimble budgeting processes decreases the cost and time spent on analysis while increasing the quality of decision-making.

Financial Performance Management (FPM) software can also be referred to as Corporate Performance Management (CPM), Financial Planning & Analysis (FP&A), or Enterprise Performance Management (EPM) software.

Business budgeting software tip

One of the biggest causes of rigid budgets? Outdated or unavailable data. As your business grows, the challenge of consolidating all the data you need for budgeting increases exponentially. New processes must be put in place, new data sources need to be accounted for, and new complications—like foreign currency conversions—need to be taken care of. Your business budgeting software of choice should be able to create flexible budgets.

3. Too many departments are over budget

It’s all too common for budgeting to occur in a silo, especially if you’re primarily using manual methods to collect and process data. When information only flows in one direction—from the people you’re budgeting for to the people doing the budgeting—it’s especially difficult to budget realistically.

The result? Departments that keep going over budget.

While stricter controls can be put in place to keep this from happening, these patterns are more a signal of unrealistic budgets than anything else. And if your budgeting process doesn’t account for any flexibility after the budgeting itself is done, then teams are stuck with a tough choice: fail to deliver on essential projects or go over budget.

They’ll usually pick the latter.

Business budgeting software tip

Many examples of dedicated budgeting software for business are built with data integration as a core feature—meaning the ability to pull information from multiple sources and centralize it in a platform where budgets can be created effectively. This is essential to prevent budgets from being built in a silo. Review what’s available with your current solution and make it a key component of selecting any budgeting software. For instance, not only does Prophix allow the Office of the CFO to pull data from their spreadsheets, but it also integrates natively with ERP, CRM, and HRIS systems.

4. Your business has gone through significant growth

Periods of significant growth and other changes are hugely positive for your business but they can cause massive headaches for evergreen processes like budgeting.

Maybe your organization has merged with another, or you've opened a new subsidiary. Or maybe you've just seen a massive increase in your customer base and your revenue. Either way, you suddenly have a lot more financial data to work with and entirely new financial considerations that make budgeting much more complex.

These transition periods can often surface issues with your current budgeting software—or sound the alarm when you don't have any dedicated software at all.

Note that sudden changes like these aren't the only signals to watch out for. Every new client, transaction, or additional employee adds to the amount of financial data you need to collect, analyze, and translate into business decisions. Even slow and steady growth can become unmanageable when you don't have the right tools.

Business budgeting software tip

If you’re currently using business budgeting software, make sure to keep tabs on how effective it is at different stages of your organization’s growth. You’ll know you need a better solution if complaints about inefficient processes and rigid budgets increase as your company grows.

If you’re still in the market for budgeting software for your business, try to anticipate how your needs will change as the business grows. This will prevent you from investing ina platform that doesn’t scale with you.

5. Your profitability is experiencing a decline

It’s all too common for teams outside the Office of the CFO to cheer as they watch revenues increase without considering the organization’s broader financial health. But as a finance leader, you know that if every dollar of revenue comes with two dollars of expenses, you’re not really growing.

Without the proper tools for budgeting, it’s all too common for organizations to create unrealistic budgets—often due to lackluster data. Sometimes, that leads to departments going over budget. But there are situations where the entire organization may take a hit in its profitability.

When you add robust business budgeting software to your tool stack, you can quickly generate the findings you need to keep your organization profitable—or at the very least report on any drops in profitability that might occur.

Business budgeting software tip

The best examples of business budgeting software give the Office of the CFO the ability to create dashboards for business users so everyone can be more aware of what goes into keeping the organization as profitable as possible without sacrificing essential projects.

6. You’re frequently doubling up on work

Without business budgeting software, annual budgeting and similar processes will often involve decentralized, fragmented teams each scrambling to collect data and forecast needs for portions of the organization. Unless these teams are in constant communication—or use inherently collaborative tools—they’re likely to double up on work.

That includes exporting the same reports multiple times with slight variations, seeking out data that’s already been collected by another team, or even working on budgets for the same departments.

This results in wasted hours, the overall process taking much longer to close, and frustration as teams try to consolidate conflicting information. When you centralize your budgeting processes in a single platform, all your teams know exactly who’s working on what.

Business budgeting software tip

Not all business budgeting software is created equal, and you should seek out platforms that are built for collaborative processes from the ground up. Spreadsheets, for instance, aren’t particularly collaborative, but neither are some of the most popular budgeting software choices. This is a topic you should try and cover in any sales calls for a solution you’re looking to acquire or test if a free trial period is available.

How All-Star Directories saved 6 days with business budgeting software

When Michelle Ferris from All-Star Directories first considered adopting budgeting software for business, she and her team were spending days, if not weeks, preparing their annual budget. Her team had to dedicate all their time to compiling and analyzing data. Michelle knew there was a better way to approach budgeting season, allowing her team to focus on more important things, like getting out of the office at a decent hour and spending time with family.

Frustrated and ready for a change, Michelle and her team began to consider the pros and cons of adopting a budgeting solution. Michelle wanted to give her team the freedom to focus on what really matters both at work and outside of it.

After implementing Financial Performance Management (FPM) software as a solution to their budgeting woes, All-Star Directories saved 6 full days of work on their budgeting processes. Michelle’s team can complete their budget in a few short hours, freeing them up to conduct strategic analysis.

Now, Michelle and her team are enjoying better work-life balance instead of stressing over budgeting season. They are confident their budgets are accurate, current, and automated, allowing the team to tackle more strategic projects after some well-earned downtime.

Want to learn more about Michelle’s success with budgeting software for business? Read All-Directories’ case study here.

Choose the right budgeting software for your business

Ditching spreadsheets and hopping on board with budgeting software for business is a smart move. However, spotting the signs that you need budgeting software is half the battle.

Take a leaf out of All-Star Directories' book – budgeting software can save time and is resource-friendly. Picking the right one for your business? That's essential.

Want to further explore budgeting software for your business? Check out the 21 best business budgeting software for CFOs.