Budget season is right around the corner and it is time for financial teams to come together and start planning for 2024, 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 4 ways to prepare that will smooth out your budgeting process.
Ease of Data Collection
Gathering the necessary data for creating a yearly budget can be a time-consuming task for financial professionals. The efficiency of this process greatly depends on how easily the required data can be collected. In-house data can often be disorganized, especially when manual processes are still in use. These manual processes introduce the risk of human error, which can significantly prolong 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
Before diving into the budgeting process, it is crucial to foster collaboration with the departments that are essential in creating the budget. By discussing goals and expectations with each team, a solid foundation can be established for the allocation of budgets 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 like NetSuite.
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 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 be done.
Rolling Forecasts Keep You in the Loop
An effective strategy for finance teams is to incorporate rolling forecasts throughout the year. By regularly revisiting their planned budget and comparing it to their actual progress, businesses can ensure that everything stays on track and streamline the process of budgeting for the following year.
Rolling forecasts typically look ahead 6-12 months, providing businesses with the ability to allocate resources more effectively and prepare for any potential disruptions that may arise.
Getting a head start in the annual budgeting season is essential for a productive and prosperous budgeting cycle. Leveraging available tools and automation not only enhances organization and efficiency within a company but also simplifies the entire process. By implementing these valuable tips, you'll undoubtedly find yourself grateful when you reach the end of the process and enter 2024.