No organization can get away with skipping the budgeting and planning phase. This is a critical period for financial departments because it allows teams to review short- and long-term objectives and allocate the funds that will lead to optimal outcomes.
If only it were as simple as copying last year’s budget and pasting it into the new year. As new factors emerge and more data becomes available, your budget and forecast for the upcoming year will also likely need to be adjusted.
This process deserves careful attention so that the right activities are prioritized and the most educated decisions can be made. But it’s also true that streamlining the budgeting, planning and forecasting phase has inherent benefits to your bottom line and to the organization at large. Less time spent planning and budgeting equals more time to put strategies into action.
Here’s how you can accelerate the budgeting cycle and achieve agility in your organization:
1. Review Root Causes of Company Performance
Numbers can tell a compelling story, but it’s also important to understand the why behind those numbers. Looking beyond surface-level figures can help decision-makers understand the impact of their budgeting and determine what needs to happen to influence their numbers moving forward.
To do this effectively, it’s important to break down any data silos that prevent you from getting a holistic picture of your data. Viewing data collectively rather than based on individual departments or functions can help you make more impactful connections and gain deeper insights to drive decision-making.
2. Use “What If” Forecasting
Many companies still look to previous budgets and results to set their spending pace for the upcoming term. This can serve as an effective starting point, but it fails to take into account any future variables that may change your organization’s direction.
Instead, using “What If” forecasting can help you see the impact of your budget across a variety of scenarios. As new events occur throughout the year, the “What If” scenarios will have already accounted for these impacts so you can adjust your spending with agility.
3. Find the Balance of Detail and Simplicity
Too much detail in the budget can distract from core business objectives, while too little detail can overlook critical expenses and investment opportunities. Striking this balance is no easy feat. But when you do, you can better sift through the most important data without too many details or missed opportunities to derail your efforts.
How an ERP Solution Supports the Budgeting Cycle
Consider your budgeting cycle as another cost of doing business. This is your chance to establish how you plan to operate in the coming term, and your business’ success and financial well-being depend on it.
An ERP solution can provide you with all the data you need to accelerate the budgeting cycle. Robust features like automation, visual data illustrations and budgeting templates can help you shorten the cycle and achieve organizational agility. Learn more about the benefits of ERP by reaching out to us. We’d love to chat.