Your budget is the roadmap that allows your company to keep moving forward with a singular focus, unfortunately they are too often rendered useless by the time intensive process, frustration and lack of ownership behind them.
In a typical budget cycle, spreadsheets are prepared by the finance department and distributed to cost centres; line managers populate the spreadsheets, which are then collected and correlated by finance. Often spreadsheets are inadvertently changed or incorrectly completed by non-financial users and the finance department is left to untangle costs and collate multiple versions into one centralised document.
Management reviews the budget, rejects it for a multitude of reasons sending it back to finance, who then reverts back to cost centres for revisions. And so begins a seemingly endless loop, taking up valuable time and increasing the cost to the company daily.
Often, after the loop has been running for too long, senior management will try to salvage the situation and instruct the accountants to alter them centrally and finalise the budget. This leads to frustration from line management, feeling that they have “wasted their time” and the ownership of their budgets is negated, likely resulting in resistance to accountability for actual versus budget spend.
The typical budget takes a long time to complete and is inflexible, with limited ability to make real-time amendments.
The ideal solution is a collaboration of management across departments, with finance only providing input and direction. This solution should allow end users to budget and re-budget their activities in real time, and independently of other departments, regions and divisions, while automatically giving online aggregation of multiple hierarchical structures.
The result is that users become empowered and are willing to be accountable and responsible for their budgets; providing a platform for positive actual versus budget management at a cost centre level. Budget cycles are reduced from months to weeks. And the finance department is free to focus on the budget process timelines, anomalies and providing financial guidance to non-financial managers.