It’s no surprise that a recent CFO.com survey asking CFOs what concerns them most in their role is budgeting & forecasting.
It’s clear that budgeting and forecasting are still front and center and organizations need to find ways to improve these mission-critical business processes.
A well-defined budgeting process allows professionals in finance departments to make better and more informed business decisions because it produces financial documents that accurately capture the complete costs of producing their products and services. The five steps we revealed in a recent webinar are intended to help you address this challenge head-on.
Step 1 – Gain an accurate picture of the budgeting landscape
- Identifying everyone in the finance department who is involved in your budgeting processes
- Identifying everyone outside of your department who contributes to your budgets
- Conduct a workflow review to see how and when information and data critical to your budget is being gathered, stored, and analyzed
Step 2 – Identify the infrastructure to support the budgeting process
- Document the current budgeting process
- Identify financial and project planning tools
Step 3 – Define Budget Parameters and Metrics
- Define the degree of detail required
- Review peers & analysts to determine KPI’s
- Establish KPI’s
Step 4 – Enable and encourage collaboration
- Identify people and roles
- Use Mgmt. Meetings and feedback forums
Step 5 – Plan for Changing Conditions
- Conduct monthly forecasts
- Conduct rolling forecasts
- What-if analysis
Bonus Step #6 – Leverage a budgeting software solution
To free up the finance team’s time so they can shift from data collectors to data analysts. It is important to adopt software solutions designed to increase the efficiency, accuracy, and consistency of your budgeting processes.
As companies position themselves to survive the peaks and troughs of the economy, it becomes more important than ever to have access to important data and information to remain competitive.
To view the full webinar, click here.