Are you looking to get buy-in for a budgeting and forecasting system project? Here are eight selling points to get your senior managers to sit up and take notice.
1) Efficiency. The use of a purpose built, multi access budgeting database will automate consolidation of budgets, automate reporting and planning and automate integration to source systems. By automating these processes you can reduce or eliminate large numbers of manual tasks in Excel. This factor alone is often enough to justify a project for some organisations.
2) Non-financial planning drivers. The use of parameters or budgeting assumptions will automatically create a number of budget lines. An everyday example is how planning headcount and grade will drive the payroll accounts in the general ledger such as wages, tax, superannuation. Imagine also being able to produce your P&L down to the gross profit line using only non-financial drivers.
3) Business intelligence. Some budgeting products offer BI and reporting capability all in one. This means it doubles up and replaces a number of ad hoc and reporting currently handled with older and limited reporting products such as Crystal. Not only that but many of the best budgeting systems will have dashboards and KPI reports built-in. Imagine the value of having a single powerful reporting product rather than a number of different systems?
4) Confidence. Many companies are unable to provide the information requested by senior management in a timely manner and with a degree of confidence. Or if you do provide an answer with a reasonable degree of accuracy, it takes so long to provide that the data is already dated. Not easy to account for in an ROI, but if you provide an answer with clear assumptions, your senior managers will thank you for it when it is their head on the block.
5) Accountability. When budgeting and forecasting is a self-service, easy to deploy process, there is no blame game, “they’re not my numbers”. While it is difficult to apply an ROI to this it will certainly result in a more aligned organisation.
6) Business modelling. A fully featured budgeting system will allow you to provide not just one answer, ie the budget, but a range of answers and options with key assumptions built in. People like to have choice. Imagine going to senior management with three or five budgets where they can decide on the most likely scenario to go with as the main annual plan. This is true decision support. How much value can you put on a good decision?
7) Poor financial systems. A good budgeting system can make up for the inadequacies of a finance system. Many tasks such as reallocations of cost are better managed outside of the world of debits and credits, resulting in reporting with a real basis of preparation of your management reports. You will also be able to generate reports from your financial systems with ad hoc analysis to drill down to the underlying numbers.
8) Strategic alignment. It may sound like a lofty goal but with a broad featured budgeting system, it becomes far easier to implement and track strategic initiatives. This results in real savings to the bottom line.
So if you thought budgeting was just about replacing Excel and speeding things up, this could be just the start of things that a combined budgeting and BI platform can do for your business. How do you put a value on it? It’s not easy. There are possibly efficiency savings alone which can justify a project. However if you can talk persuasively to senior management with a focus on meeting the objectives of the business and what it means for them, you will find a project far easier to justify and do great things for your career as well!
Wanting to streamline your budgeting and forecasting? Register for our free seminar here.