Now is a Good Time to Review 2016 Budgeting Best Practices
Using a budgeting and reporting process that is effective and efficient will pay dividends all year long. We’re halfway through Q1 so now is a good time to start monitoring whether last year's budgeting and reporting processes are delivering the results you need.
If things are clicking right along, no problem. If not, now is the time to review best practices for your budgeting reporting process. Paying attention to what’s not working now, and changing it for next year, will ensure a smoother process and more accurate results.
Be on the lookout (BOLO) for ways to:
Streamline the budgeting reporting process
Your accounting software should have built-in budget and forecasting tools. Accounting software with integrated G/L and Wage & Salary budgeting provides the most accurate information.
Paperless office functionality also helps streamline the budgeting process. Being able to attach digital documents and drill down from a single screen saves time and provides managers the detailed information they need to make good business decisions.
Create monthly budgets
Taking a budget number and dividing it equally over 12 months is one way to budget but it's not the most accurate way.
Accounting for seasonal trends in both revenues and expenditures makes budget numbers more accurate. At SBS, for example, we work with several media companies whose revenue and expenses vary with the seasons such as holiday shopping, back-to-school, and elections.
You should be able to access historical data and run projections and comparisons in your accounting software from a single screen. Reviewing revenue and expenses from the previous three to five years will help you identify trends and build those seasonal variations into your budgets.
Delegate budgeting responsibility to the proper users
When carefully considered, the budgeting and reporting process turns from a dreaded hassle to a powerful business tool.
Accounting software that lets you create role-specific user groups, automate the approval process, and run reports on the fly will keep the budgeting process moving.
Being able to add users or update privileges ensures that users have access to the data they need when they need it. Having the flexibility to automatically re-route approvals means the process won’t stall if a someone is out of the office.
Report on what is most valuable
Review the reports that are available in your accounting software, which are most used, and which provide the best information for different levels of users.
Be sure to consider the audience - are reports provided in a format that is meaningful or useful? If not, eliminate.
Be accurate
Generating accurate data is critical to a successful budgeting reporting process. Some companies start out using spreadsheets to do their budgeting. They soon outgrow spreadsheet budgeting due to the impossibility of keeping data current across users and throughout the budgeting process.
Accounting software with a built-in budgeting and reporting process lets users access the most current data, run accurate comparisons, and prepare presentation-quality forecasts.
Paying attention to how your budgeting and reporting processes is serving you this year will help you save time (and frustration) when you begin planning for next year.
