Budget season is underway and it is time for financial teams to come together and start planning for 2023, but are you ready? Going into a new year with a clear and concise budget is something that cannot be overlooked by a business owner.
Setting plans and identifying the opportunities that will keep the doors open into the new year, as well as accelerating growth, all fall into the budgeting process. However, coming up with next year's budget doesn't have to be as painful as it may seem. Starting early can help, but we wanted to share 3 ways to prepare that will smooth out your budgeting process.
Ease of Data Collection
Financial professionals spend hours collecting the necessary data that is necessary for putting together a yearly budget, however, the time it takes boils down to how easy it is to collect the data that is needed. In-house data can be messy at times, especially when there are manual processes still in place. Manual processes open up the possibility for human error and that will quickly add time to the budgeting process.
Finding ways to automate the data collection process adds an incredible amount of overall efficiency and accuracy to the company's data and makes the collection process for budgeting much faster.
Collaboration Across All Involved Parties
Prior to starting the budgeting process, it is critical to collaborate with the departments that play a necessary role in budget creation. Reviewing the goals and expectations with each team will help lay the groundwork for how budgets will be allocated within the company.
Reviewing what worked this year, or didn't work, and what adjustments can be made will help paint a clearer picture for everyone involved. Once the goals and expectations are established, those handling the planning and budgeting must identify all who will be involved in those processes and involve them in setting the budget moving forward. Budgeting works best when all associated parties are involved.
Having the Right Tools for the Job
With any business process, efficiency is key. But how can the budgeting team make it through the budgeting season efficiently and effectively? There is no simple universal solution to that question, but a good starting point would be implementing a modern cloud-based, ERP system.
Cloud-based systems for companies help tie together all areas of the business, no matter where they are located, and remove those inconsistent manual processes. It allows for the budgeting team to pull together critical financial data and information instantly from wherever they need to make for a smooth budget season.
Having a set process for establishing a budget will also help. It can keep things simple and straightforward, along with not overcomplicating what needs to get done.
A useful tactic for finance teams is to utilize rolling forecasts throughout the year. Businesses that regularly visit their planned budget throughout the year to check in and compare where they are to how much the budget was allotted allow everything to be kept in check and an easier process when budgeting for the following year. Rolling forecasts typically extend 6-12 months into the future to give businesses the ability to better allocate resources and prepare to manage through any disruptions.
Preparing yourself early in the annual budgeting season is crucial to having a meaningful and successful budgeting cycle. Using available tools and automation helps keep a company more organized, and efficient and makes the process easier all around. You will certainly be thanking yourself at the end of the process for implementing some of these tips.