Build better budgets and forecastsBuild the right plan for your company’s future
Building the correct budget can set your company up for the year ahead. However, budgeting can be a much-maligned process within many organisations. Too often, completed budgets are held back by errors and a lack of room for genuine analysis or insight.
In many organisations, it is often issues with the cross-team coordination that lead to problems, with inefficient and tedious processes that are reliant on too-complex spreadsheets that provide no opportunity for effective collaboration.
Traditional budgeting methods and why they need to change.
A budget takes a significant amount of work to set up. It relies on many different people working on the document, typically in a linear fashion. As a result, it is not uncommon for many important details to be missed if the budget is not taking your company’s full position into account. For example, if built from the top-down, budgets can miss out on the detail of your data and make forecasting from that budget inaccurate. But if built from the bottom up, it can miss the big picture and take far longer to put together due to the increase in input from various teams. The wider the field of inputs, the tougher effective version control becomes, and the higher the error rate gets. As a result, many budgets hold some errors, from a changed formula to missed data entry.
Due to the complexity of building a budget through a static spreadsheet, it can be almost impossible to review the figures and make changes. This means that your company will be unable to respond to significant market changes or variances from the forecast, be they good or bad, until the figures can be re-analysed at the end of the financial year. Forecasts are also primarily based on your previous years’ data, leading to inaccurate conclusions being drawn. The ability to review your figures with some more recent, actual data is key to maintaining your course through the year.
The new way to build a budget
There is a better, more modern way to do your budgeting and forecasting for the coming year. Having a simple cloud-based tool, like Phocas’ Budgeting and Forecasting module, manages workflows and processes to increase collaboration while ensuring that everyone is working from a single source of truth. It allows the balance of top-down and bottom-up detailing required to get the most accurate picture for the coming year.
Forecasting incorporates scenario planning so that you can be best prepared for the introduction of something new into your business. Reviewing your figures and re-forecasting is simple and can be done half-yearly or quarterly, allowing your business to remain dynamic and responsive to change.
These features lead to the production of budgets and forecasts that are more in tune with reality and can be used as actionable information, rather than just referred to at month-end.
Make the best use of your data to grow sales
If you are searching for a way to increase sales, your first instinct might be to hire and onboard new salespeople. However, as the economy slows and organisations are forced to do more with less, it can be wise to investigate alternative strategies to grow sales. The data found in your MYOB ERP system holds the key to unlocking the power of your sales team. But how do you leverage it in an accurate, actionable format?
The Future of Financial Reporting
In May 2021, we held a webinar with Phocas Software that explored the future of financial reporting. In it, we covered the various processes that can hold your finance team back and how Phocas’ Financial Statements and Budgeting and Forecasting modules can simplify your processes and improve workflows.
Watch it here:
Streamline your EOFY process.
The EOFY should be seen as a trigger for business and strategic decisions. Have a look at the 10 simple things you can do in your business to ensure that the next year is your best year yet.
The end of the financial year can be stressful, especially for the finance team. Even with your busy schedule, there are things you can do to make this process as smooth as possible. Ensure you have everything you need to prepare for the EOFY, including specialised Training Courses, helpful content and our valuable checklists!
For more information about a modern reporting platform like Phocas Software and whether it is suitable for your business requirements, please send an email to email@example.com or call us at 1300 857 464 (AU) or 0800 436 774 (NZ). Our team is happy to answer any questions you may have.