New Yearâ€™s Resolution: How About a new Approach to Budgeting and Planning?
Posted by Rami Ali, Senior Product Marketing Manager
Congratulations are in order! You finally wrapped up the annual budget during the craziness of the holiday season. Talk about multi-tasking.
Each year, organizations scramble through multiple iterations and approvals to finalize the annual budget before the yearly deadline. The process kicks off as early as June, and accounting and finance teams hope to wrap up the annual budget by November/December so they can effectively track and manage organizational performance in the new year.
Everyone is now firming up their New Yearâ€™s resolutions. From more exercise to less screen time, resolutions are all about improvement. So, when it comes to professional or organizational goals, why not put a better budgeting and planning process on the list this year?
Reflecting on last yearâ€™s budgeting process
With the budgeting season over, letâ€™s take a moment to reflect. Itâ€™s easy to jump to the next order of business and forget about the unbearable pain and lengthy hours spent back and forth with stakeholders. While itâ€™s fresh, what are some key takeaways that can be used for improving your next planning and budget cycle?
- How would you compare the process (from beginning to end) to the prior year?
- How long did it take to reach the first draft or submission of the budget?
- How many iterations did the budget go through before being finalized?
- How many levels of approval did the budget have to go through?
- How many approvers required visuals or â€˜less-numericalâ€™ ways of presenting the budget?
- How many approvers asked for additional insight into historical data?
- What tools and systems did you use in the process?
Budgeting and Planning in 2020
Now letâ€™s set goals for improvement. Were there any identifiable risks or bottlenecks in the process? What would the executives like to see more or less of? What about other stakeholders? This is, after all, a partnership.
Goals could be potentially look like:
- Reduce the budgeting cycle time by up to 90%
- Reduce the number of levels of approval
- Increase the amount of executive involvement
- Enable stakeholders/approvers to access data themselves
The tools to get there
Finance teams need to take a hard look at the tools, systems, and steps in the overall process to map out new tactics in realizing these goals. Here are a few recommendations:
- Single source of data:Â Data moves through systems and tools. Any time data passes from one system to another, there is room for human error. Integrating systems and data can enable finance to have a single place to view the entire business and how the pieces fit together as they build out their annual budgets.
- Enforce new deadlines with stakeholders:Â The annual budget process involves many partners and stakeholders across the organization. Communication of deadlines is critical to producing the budget on time. Why not introduce new deadlines that enable your team more time to finalize their own analysis and recommendations? Make the process and expectations clear to all parties involved prior to the budgeting season.
- Leverage rolling forecasts:Â A continuing trend in the world of financial planning and analysis, rolling forecasts enable teams to have greater flexibility in their planning process. Typically, a rolling forecast extends 4-6 months into the future, giving businesses the agility to better allocate resources.
- Adopt new budgeting and planning technology:Â Most of the challenges in the budgeting and planning process stem from leveraging the wrong tools. Organizations rely too heavily on multiple spreadsheets that get lost in the shuffle of the season. Budgeting and Planning software [NF1] exists to help organizations streamline the budgeting process by bringing together systems and stakeholders in one controlled environment.
How NetSuite could help?
NetSuite Planning and Budgeting facilitates both company-wide and departmental planning with modeling capabilities, approval workflows and reporting within one collaborative, scalable solution. A cloud-based planning and budgeting solution makes data accessible, in real-time, to everyone who needs to see such information. Accessibility boosts participation and accountability, making it easier to get meaningful input and engagement.
Learn more about NetSuite Planning and Budgeting.