Part two of a three blog series on budgeting challenges.
Use Technology to Tackle the Five Biggest Challenges to Budgeting
Make every dollar count for your organization’s future success.
2. Eliminate Silo Budgeting
Now, with one software system used across all departments in your jurisdiction, you can eliminate duplicate budget line items, simultaneously create departmental budgets, ensure full accountability and guarantee all necessary initiatives and projects are considered for funding. This one-system approach not only contributes to shortening your budgeting cycle, but also increases the accuracy of the annual budget you submit for review and approval. With fewer questions and corrections to make during the development stage, you allocate more time for value-adding activities and analyses.
When all departments work from the same information in the same software system, the budget produced represents “one version of the truth,” rather than a variety of stand-alone, disjointed budget proposals that do not represent departmental collaboration.
The “rat’s nest” of data formats as a result of this siloed approach is enough to add weeks to the budgeting process due to the tedious nature of compiling inconsistent information and is prone to errors that sometimes aren’t discovered until it’s too late. Often this very situation causes a critical project to go unfunded and the various departments end up pointing fingers at each other trying to place blame.
Strong, continuous inter-departmental collaboration, fueled by one comprehensive software system, eliminates departments functioning like franchises and wasting valuable time working
in constant reactive mode. An additional and all-important benefit to not forget is that by using the same system across all departments, you can plan faster, preemptively and make more informed decisions because all departments and stakeholders are working from the same overall budget produced from a single system. This is true whether you’ve adopted a centralized or decentralized budgeting process. With the proper controls in place ensured by a unified, easy-to-use and flexible technology, all types of budgets can be accommodated.
Capital investments often utilize a separate budgeting and planning process simply because the expenses are large, and the length of the projects are long; for example, a product development project needing developers, testers, sales and management teams. These projects can have material impacts on the future cash flow of your organization in both the short and long-term. The software system should be able to alleviate your project accounting challenges with spending thresholds that support the checks and balances you need to stay on track and accountable for your multiple project budgets.
Organizations need to continuously innovate and improve in order to remain competitive. The improvements attract new businesses and foster subsequent projects that keep the organization moving forward. The CFO/Board of Directors, however, do require transparency into the expenses and projected ROI, so your software system must be able to accurately report on the capital plan and future cash projections, confirming that these dollars are being spent responsibly resulting in a positive ROI.
Ready to take the next step? Contact us to learn more!
Click here if you missed part one!