When Michelle Ferris from All-Star Directories first considered adopting budgeting software, 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 Corporate Performance Management (CPM) software as a solution to their budgeting woes, All-Star Directories was able to save 6 full days of work on their budgeting processes. Now, Michelle’s team can complete their budget in a few short hours, freeing them up to conduct strategic analysis.
So, how do you know if budget software is right for your organization? We’ve put together a list of the top 6 signs you need to transform your approach to budgeting.
1. You Spend A Lot of Time on Budgeting
In some cases, budgeting can consume up to 6 months and 20% of management’s time. This is a massive amount of time to spent on a task that merely serves to prepare your company for the next fiscal year.
If your finance team spends most of their time preparing, reviewing, and finalizing your annual budget – it’s time to consider purchasing budget software. You can shift your focus to the bigger picture, allowing your finance team to generate valuable insights.
Ideally, your budgeting process should take no longer than a few days – with minimal data entry and validation on behalf of your finance team. Most of their time should be dedicated to analysis, guiding your leadership team in their strategic decision-making.
2. You Can’t Plan for the Future
While not explicitly related to budgeting, forecasting is an important part of your company’s financial health.
Are you limited in your view of the future? How far can your company look ahead – 1 month, 3 years, or 100 years? Can you create a rolling, multi-year, or driver-based forecast?
Often for companies that are using Excel as their budgeting tool, forecasts are outdated shortly after they’re completed. They rely on static or fixed data, which hinders the forward-looking nature of forecasting.
Budgeting solutions give you the ability to work with updated data that can reflect even the slightest change in your business or market. Accurate forecasting can give you a clear picture of your company’s health both in the present and in the future, making yearly budgets less critical to your success.
3. 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.
Companies that have adopted a budgeting solution, such as a Corporate Performance Management (CPM) 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.
4. Your Business is Growing
One of the primary benefits of a budgeting solution is its scalability. As your business grows, your finance team should be able to grow with it and succeed amidst the changing variables.
Every new client, transaction, or additional employee adds to the amount of financial data that you must collect, analyze, and translate into business decisions.
Not to mention, tasks are often distributed across your organization and may require employees around the globe to contribute to the process. Budgeting solutions, like CPM software, allow you to deploy efficient workflows and improve collaboration throughout your organization.
5. Budgeting is Costing You Money
Your inefficient budgeting processes could be costing you money – in more ways than one.
Many public and government companies have fallen victim to a small spreadsheet error that cost their company millions of dollars. For example, Fannie Mae miscalculated their shareholder equity by $1.1 billion, all because of a simple spreadsheet error.
Your budgeting process could also be costing you in staff time, which could be better allocated to analysis and strategic decision-making.
6. Finding the Right Fit: Budget Software
If your budgeting process is time-consuming, manual, and prone to errors, your organization would benefit from budget software. In this article, we covered 6 key signs your budgeting process needs a makeover, allowing you to concentrate on the wellbeing of your finance team.
Here are a few key takeaways:
- With improved collaboration and automated processes, your budget should only take a few days to prepare
- Your forecasts should be dynamic and forward-looking, giving you a clear picture of both the near and longer-term future
- A flexible approach to budgeting will allow you to react to both internal and external variables that arise during the budget season
- If your organization is expanding, adopting budget software can alleviate growing pains associated with manual data entry and workflow
- And finally, if your budgeting process is costing you money, rather than saving it, it’s time to consider budget software
Now, Michelle and her team are enjoying the summer weather 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.