Completing your budgets at the eleventh hour?

It’s already June and yet again you are spending late nights and weekends trying to get the budget ready for review by the board. The same old problems crop up each and every year and you swear never again! Does this sound familiar?

Why do the same problems crop up every year? Possibly:

  • Only 3 out of the 10 budget input spreadsheets consolidate seamlessly to the Excel master version, the rest have been altered by cost centre managers and are causing broken links and formulae errors
  • The marketing manager has not submitted her budget at all, because she says her Excel file got corrupted and she needs to start again
  • The logistics manager has emailed 4 different spreadsheet versions and you’re not sure which one is correct
  • You discover total overheads are too low because the input templates were missing several new accounts which were added to the ERP system last month
  • The master spreadsheet takes over 20 minutes to open and often crashes when recalculating
  • The sales margins are too high because unit costs for new product lines are missing, despite repeated reminders to the factory accountant to fill out all colour coded cells
  • The CFO is questioning the sales revenue figure, however the notes and assumptions are located on a separate disconnected spreadsheet file that the Sales Manager (now on holiday) has neglected to save on the network drive
  • The total HR spend was locked in last week, but the figure has since changed and there is no audit trail to understand what change has been made and by whom


When approaching the tail end of budget period, these are the typical problems and issues that we hear about using Excel spreadsheets. It is not a good time of the year and many are forced to plan their year around it with long hours burning the midnight oil.

Much of that time is actually spent re-working, fixing and cleaning up data and formula issues in Excel as opposed to scrutinising the numbers and understanding the key assumptions and drivers for the new year.

It is a huge effort just to consolidate data from all the budget contributors once, let alone for each budget version that must be endured.

Fortunately there are cost effective solutions out there and many top performing organisations are already using them to continuously plan through monthly rolling forecasts. While budgets are important, they are pretty much outdated as soon as they are completed. What is more important is re-forecasting and consistently looking ahead.

Make your next budgeting and forecasting process less stressful and more efficient. QMetrix are finance professionals who have successfully implemented corporate Budgeting and Planning solutionsfor many organisations. Don’t let the pain of budget cycle repeat itself for 2020.

 

This post was originally published on 9 June 2015 and updated since.

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