3 ways to prepare for budgeting season

Entering Q4 of 2020, budgeting season is right around the corner, for some, it begins as early as August, with finance teams hoping to wrap up the annual budget before their set yearly deadline, typically in December.

The importance of the budget cannot be overstated. Charities and non-profits need to set plans and identify opportunities that will keep their organisation operating as well as accelerate growth in the Covid-19 ravaged economy. The accuracy and efficiency of the budgeting process is critical to organisational success.

Now is the time to get ahead. Organisations can take steps to make the actual budgeting process less of a headache than it usually is. Preparing now can improve departmental collaboration and drive a more efficient process overall, here’s how.

1. Collaborate

Before getting too far into the budgeting process, planning and budgeting leaders across the organisation need to sit down with executive leadership and re-evaluate goals and expectations, this is particularly important during the current economic situation. What worked and what didn’t work in previous years? Given the dynamic nature of the economy all previous years practices may well not be applicable.

It’s crucial that leaders establish goals and expectations, then outline assumptions for achievement that they all understand and agree upon. Once these goals and expectations are defined, planning and budgeting leaders must identify all stakeholders who will be involved in the budgeting process and when they need to be involved. These questions can help improve the budgeting process at its peak.

2. Data collection

Most planning and budgeting professionals can agree that collecting data from across the organisation is a painful process.

Organisations house data in a blended mess of systems and isolated departments that make the budgeting process difficult. Any time data passes from one system to another, there is room for human error.

Finance professionals spend hours aggregating and reconciling data before proper budgeting can even begin. Planning and budgeting leaders need to clearly outline all sources of data needed for the budgeting process and establish a cadence of collection. Highlight areas of concern where the most risk exists in the process and seek to close the gap. Many organisations turn to a single system that will aggregate all the data, enabling finance to have a comprehensive and agreed-upon view of performance for budgeting.

3. Tools

Efficiency is always top of mind. How can your team not only survive the budgeting season, but do so efficiently and effectively, and thrive? There isn’t a one-size-fits-all solution, so here’s several ideas/strategies that are proven to help:

• Adopt new technology: Cloud planning and budgeting software solutions are completely changing the way planning teams do their budgeting and analysis. If you’ve never looked at a planning and budgeting software solution, now is the time.
• Use simple templates for data collection: Don’t make it harder than it needs to be. Leverage simple and customizable templates that are easy to for business partners to comprehend. This will improve collaboration between teams.
• Dig into how data is collected: Is there any opportunity to automate data imports? How does your team create and distribute information? Work with internal partners to streamline your data aggregation process.
• Leverage rolling forecasts: A continuing trend in the world of finance, rolling forecasts enable finance teams to revisit budgets regularly and reforecast where necessary, based on new information. Typically, a rolling forecast extends 6-12 months into the future, giving businesses the agility to better allocate resources and prepare to manage through disruption. Again, taking note of the changing nature of the current economy it can prove necessary to have rolling forecasts on a 3 month basis.

Planning now is critical to having a meaningful and successful budgeting cycle. Before it gets too crazy, sit down with the team and have an open and honest conversation. You can prepare now! And there’s no doubt you’ll thank yourself as you work towards completing your annual budget.

How NetSuite could help?

NetSuite Planning and Budgeting facilitates both company-wide and departmental planning with modelling capabilities, approval workflows and reporting within one collaborative, scalable solution. A cloud-based planning and budgeting solution makes data accessible, in real-time, to everyone who needs to see such information. Accessibility boosts participation and accountability, making it easier to get meaningful input and engagement.

Cloud Doing Good is running a series of webinars specifically for finance teams working in charities and non-profits, if you would like to sign up for the series please click here.