For a majority of businesses, Excel is still the basic budgeting tool used. Consequently, Excel deeply influences the way the business budgeting process works.
The Typical Budgeting Cycle
Budget planning typically begins around 4 months before the final budget is due. For the sheer workload of preparing the budget accounts for the amount of time devoted to it, a large portion of this workload involves coming up with some sort of budget input template.
Most often, this template is created in Excel. Typically an Excel workbook is created for each:
- User
- Location
- Department
In this way, security and population of data is managed. The resources allocated to the creation of these templates represents a major part of the budgeting cycle.
Once the templates are finished, they are typically given to end users to fill out. In the real world, it often takes quite a bit of time to get the budget input done. The budgeting process is rarely popular, and it takes a considerable amount of time when all the while normal work needs to be done. In part, the design of the template can be a factor in slowing data input. And when the input is complete, there is the enormous task of combining all the information into one master worksheet.
Excel makes this merging difficult as individual users will have made changes to the template by:
- Deleting a row
- Altering a formula
- Typing text where it shouldn’t be
As a result the linkages that had been laboriously created initially are broken.
Once the merging is complete, there is the review process as specific numbers are examined – this can drag on even while attempting to finalize the budget. All the while there is a deadline when the completed budget is to be presented to senior management. In the rush to make the deadline, very often errors get overlooked.
Making The Budgeting Process Smoother And More Productive
1. Realistic Timelines
Managers should always remember a simple truth: No one enjoys budgeting. End users lose time that would otherwise be devoted to regular work, so time must be found for budgeting. A further source of anxiety is that individuals are creating numbers that they will be held accountable for. As a result, those managers responsible for the budgeting process should keep in mind when designing templates, processes, and timelines that end users consider budgeting a burden. By keeping the end user’s experience in mind and building the budgeting process around this fact will allow for a faster process and better numbers.
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2. Tailor systems and processes to individuals
For example, using templates that accounting is comfortable with might cause problems for a sales manager. Ensuring that relevant documents are comprehensible and transparent to users, it can go a long way to obtain better data and ease the burden during the budgeting process.
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3.Free sharing of information and collaboration
Free sharing of information and collaboration in the budgeting process greatly increases speed and, once again, yields better numbers.
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4.Use an application to streamline the process
Excel is a great tool, but as you increase the number of users, it starts to come apart. Employing a different solution in the generation and input of budget data can dramatically improve the budget cycle.
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Because the budgeting process isn’t something that users are involved with daily throughout the year, it is a process that can undergo significant alteration. Implementation, however, should be done in strategic stages to ensure end users are comfortable with the changes. And there’s no one size fits all process. Each company has to work out the solution that best fits their culture and structure.
Need help smoothing the budgeting process or want to learn more budgeting best practices? TGO has the knowledge and experience to help you find a solution to your business needs. Contact us today and lean how our solutions can benefit your business.
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