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Velosio

Build Better Budgets by Asking These 5 Questions


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When it comes to business budgeting and planning, you are really laying a foundation for how you are going to accomplish your goals.  Many people see building organizational budgets as a limiting activity, figuring out the parameters under which each department or individual must work.  However, a budget can be much more than that – it can be a critical tool in planning how you are going to execute your strategies and achieve success.

Ventana Research suggests honestly asking yourself these 5 questions in order to make your budgeting and planning successful:

  1. Is your budgeting process strategic?  Does the budget support leaderships strategies?  Can you achieve your objectives with the budget that you have?  Did you consider your organizational goals when you created the budget, or was it just an extrapolation of last year’s budget?  If major changes in the economy or market occur, can the budget be adapted to respond or does the strategy need to change to fit the budget?
  2. Is it as accurate as it should be?  Does the budgeting process create errors?  How much time are people spending correcting mathematical or logical errors in the budget?  What are the consequences of these errors going undiscovered?
  3. Does it help you be more agile?  Does the organization respond quickly enough to external changes in the economy or marketplace?  Do you respond in a coordinated fashion when an issue or change arises?  Do you conduct “what-if” analysis or contingency planning across the entire organization – not just one department or product line?
  4. Does it deliver deeper insight?  What assumptions are being made during forecasting and are they consistent throughout the organization?  Does the revenue forecast make sense in light of the sales budget?  Do you have the right number of support personnel?
  5. Does it improve the quality of the process itself?  Can you shorten the amount of time creating a detailed budget?  Is the process consistent across departments and from year to year?

Ventana also asserts that almost 2/3rds of companies rely completely on spreadsheets to do their budgeting, but they expect a majority of mid-market companies to adopt budgeting software systems and tools in the next five years.  Most ERP solutions, in addition to leveraging Excel, include budgeting and planning tools that enable you to pull from data already in the system.  Microsoft Dynamics GP, for example, includes two great budgeting tools, Forecaster and Adaptive Planning.  Learn more about Microsoft Dynamics GP’s budgeting tools here.

Contact us today to improve your budgeting and business processes with a new ERP solution.

By Socius, a Microsoft Dynamics GP Partner in Ohio (www.socius1.com)

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