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The Case for a Streamlined Budget Process

Financial planning and analysis is an important business process that can help gain insight to a company’s financial stability. The importance of a streamlined budgeting process can save a company tremendous amounts of time. Many companies spend the majority of their time gathering data and transferring it from spreadsheet to spreadsheet and template to template. They end up losing time which should be spent analyzing the data, understanding what the data means, and producing useful financial reports to drive a company’s management decision-making process.

Everyone knows that towards the end of each year, a company will go through a budgeting process. The budgeting process can be a complex, daunting, and time consuming process; however, it serves a purpose. A budget is important because it:

  • Sets target on profitability
  • Communicates priorities
  • Controls spending

A budget is a blueprint for a company’s financial well-being, which sets goals and evaluates a company’s financial health. It is a financial foundation to measure progress and identify new opportunities. It allows companies to plan for expenditures and avoid surprises that may put a company out of business.

In order to make the budget process efficient and effective, the company needs to focus on streamlining the process to align with the business area’s needs. For example, forcing a sales team to budget based on headcount, just like the number of accountants needed to process monthly financial close, isn’t operationally effective. A sales team should be budgeting based on the projected sales, which drives the number of sales representatives needed to meet the sales quota for the year. An inefficient process requires a budget analyst to do more work and combine numerous spreadsheets to fit that budget process. With an efficient process, a budget analyst can use the time to analyze the data, understand the data, and provide guidance to management for a decision.

After taking the time to comprehend the data, spending the remaining time creating useful reports for management is important. Painting a picture to tell a story guides management in the proper direction for making decisions based on the company’s financial well-being. The financial reports need to be clear, concise, and transparent. Accurate financial reports are imperative because they allow a company to gauge its profitability and control expenses. They represent a company’s financial position and performance and can identify any risk to internal and external stakeholders.

Financial reports are a powerful communication tool to provide stakeholders with adequate information to guide their decision making process.

With a streamlined budget process and the right tools to analyze and report on data, a company can begin to see the adequate benefits and cost efficiency of having a resourceful financial planning and analysis business process. 

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About Author

John Hoebler
John Hoebler

As the Technology Solutions practice lead, John focuses on overall strategy, business development, practice development and client delivery.  He leverages more than twenty years of experience to help finance teams leverage technology to streamline processes and meet organizational goals. Click here to read John's full bio.

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