Ask most business professionals which part of their job they struggle with most, and you’ll likely find budgeting, planning and forecasting at the top of the list. Which makes sense when you consider that although leaders in marketing, sales and operations have budget responsibilities, most were not hired for this primary purpose. What’s more, if they don’t have clear guidance, support or adequate tools to be successful, the budgeting process will always be something employees dread when it comes around.
“Although budgeting, forecasting and planning are vital, many organizations continue to struggle through the annual budgeting cycle with manual processes supported by spreadsheets and emails, or with legacy applications that no longer meet business needs,” said Brian Martell, senior product marketing manager for Redwood City-based Host Analytics.
Getting Employees to Love Budgeting (Almost)
While this might seem like a lofty goal, it is possible with the right resources, training and tools. Here, said Martell, are some key ways companies can help their employees take the pain out of the enterprise budgeting process.
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1. Move Your Budgeting to the Cloud
Like other executives across the organization, CFOs are investing in the digital workplace, including making the switch to digital for important business processes. In fact, 69 percent of those who answered Grant Thornton’s 2018 CFO Survey say that to stay competitive in the market, they plan to invest more in digital transformation in the coming year. And many of those dollars will be going to the cloud.
According to Gartner’s 2017 Magic Quadrant for Cloud Financial Corporate Performance Management (FCPM) Solutions (fee charged), most enterprises will move to cloud FCPM solutions by 2020. Also known as enterprise performance management (EPM), corporate performance management (CPM), financial performance management (FPM) or business financial management (BFM), these software solutions are designed to support financial planning, budgeting and forecasting processes with capabilities like financial reporting and analytics.
“Cloud-based solutions have become standard in the marketplace at an enterprise level,” said Martell. “The legacy way of filling out an Excel spreadsheet provided by the finance team, and emailing it around the organization is filled with pain points.” Among those include broken spreadsheet formulas, data security, data integrity, versioning control issues and the collaboration problems that come with exchanging files through email. The ultimate pitfall, he added, is that people lose faith in the numbers.
“Not only do these issues make the budgeting process really painful, time consuming and cumbersome, they also make it inaccurate,” said Martell. “After you’ve spent so much valuable time putting a budget together only to find out that you don’t trust the numbers, it can be demoralizing.”
That’s why it’s important to identify and address those issues as soon as you can, he recommended.
“After you’ve spent so much valuable time putting a budget together only to find out that you don’t trust the numbers, it can be demoralizing.” - Brian Martell, Host Analytics
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2. Give Users Real-Time Data
Budget owners often wonder why it takes so long for finance to give them the reports they need to fill in their budget and forecasting numbers, said Martell. Because things change so quickly, he added, if managers have to wait a week to get analytics, they end up making decisions without all the facts.
“You need to be sure the drivers you’re basing your budgeting decisions on are informed by the most recent data, instead of having to wait for reports and then interpreting the data after the fact,” he explained.
Another way to help budget owners move more smoothly through the process, he added, is to go the self-service route and let people build reports themselves, rather than having to rely on IT. Not only does this encourage ownership and responsibility, but giving people the tools they need to make more informed decisions without wasting time crunching the numbers frees them up for more strategic activities.
“When you give people quick, easy access to the data they need, they can get back to the important work of analyzing and using those insights to make better business decisions,” he said.
3. Speak In a Language They Understand
For all the potential problems that spreadsheets can cause, the simple fact is, they’re the tool of choice for financial professionals, said Martell. The rows, the columns, the formulas. They’re all written in a language that finance can understand. So making budgeting easier for those teams means giving them a user interface that includes the Excel syntax and capabilities they’ve grown accustomed to using.
Non-finance users, on the other hand, would likely yawn at the sight of a general ledger account template, so it’s important to give those budget owners terms and visuals they use in their daily work, he added. For example, a VP of marketing who lives in a world of leads, opportunities and funnels will be much more engaged in the budgeting process if the tools he or she uses are written in similar terms.
When everyone is speaking the right language, business owners are more active in the process and feel accountable for the numbers they provide to the finance team. In turn, finance gets more relevant, timely budgeting data.
“When budget owners are empowered to take responsibility in the budgeting process, they’re more engaged, and in a lot of cases rewarded because they’re getting a tool that helps them run their business better.”
Budgeting can be intimidating if it’s not part of your everyday work. And if it is your main responsibility, getting busy budget owners to fill in all their line items can be frustrating. But with the right tools, the right data, and a little communication, getting all the numbers in place will provide you with the financial roadmap you need to move your line of business and your entire organization forward.