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When the automobile was invented, people put their horse carriage in the barn. When the personal computer came along, people put their typewriters in the closet. When the video recorder was invented, people put their Super 8 cameras away for good. Throughout history, the better tool replaces the more cumbersome one.
The same is true when it comes to budgeting. In today's business world, companies can no longer afford to spend four or five months or more creating their budget with an obsolete tool, that is, through the cumbersome process of pulling together dozens and dozens of spreadsheets.
The reasons are clear:
1. Spreadsheets were never designed to process reams and reams of information quickly and easily.
2. Spreadsheets are cumbersome to change whenever there's a budgeting revision, prolonging a protracted process even more.
3. Spreadsheets offer poor security, which compromises the integrity of the budgeting documents, enabling changes to the budget to be made surreptitiously and risking exposure of confidential information to outside parties.
4. Spreadsheets are error-prone, so their accuracy is constantly in question.
Forward-thinking companies give their front line managers the tools they need to create their own budgets. The result: budgeting accuracy improves.
Gaining Control
Ultimately, it all adds up to one thing: lack of control. Companies are seeking more control over the amount of time it takes to put the budget together, more control over how long it takes to make a change in the budget whenever it's needed, more control over the accuracy of the data, and more control over who can access that data.
Fortunately, there's a solution to these problems: budgeting and planning software applications. They enable you to:
1. Accelerate the budgeting cycle so you can complete it fast.
2. Increase confidence in the accuracy of the numbers.
3. Change budgeted numbers without undue delay or tedium.
4. Engage more users in the planning process.
5. Help users become more efficient and productive.
6. Gain dynamic control over business results.
7. See immediate ?snapshots' of where the company stands in relation to the budget.
8. Achieve implementation quickly and cost effectively.
Anyone who's ever been saddled with the spreadsheet budgeting chore knows that it means long days and countless weeks of collecting information from different departments and business units, then checking the accuracy of each spreadsheet. Even simple changes to a spreadsheet result in a major undertaking. Finance managers and budget analysts tend to spend as much time verifying that all of the spreadsheets are actually linked together properly or that formulas are pristine, as they do anything else in the budgeting process. That leaves little time for more value-added activities like analyzing discrepancies, conducting what-if scenarios, and planning.
With a budgeting application, finance managers are no longer bogged down with a morass of information that must be linked together. Those tasks are handled automatically. In addition, the amount of time spent checking and verifying the numbers is reduced substantially. That gives finance managers more time to assess what the numbers mean, gain greater visibility into the future health of the company, treat sore spots before they become major infections, and make strategic course corrections that keep the company focused on its goals.
Dynamic Budgeting
Forward-thinking companies give their front line managers the tools they need to create their own budgets. The result: budgeting accuracy improves. It becomes a flexible, dynamic process that can be adjusted when external conditions warrant a change in direction or emphasis. Instead of a once-a-year event, budgeting becomes an ongoing, dynamic process that establishes a tighter connection between corporate strategy and operational activity. Spreadsheets, on the other hand, are inherently inflexible, making them incapable of serving as a living document that moves in tune with the business.
Anyone who's ever been saddled with the spreadsheet budgeting chore knows that it means long days and countless weeks of collecting information.
Suppose you needed to overhaul your budget because your company was adding a new sales division, requiring the infusion of investment to support the effort.
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