et number of times, e.g., quarterly, when they combine the year-to-date (YTD) results with the remaining updated budget for the year, to derive a forecast for that year’s results.
- Other organizations may use a rolling forecast model where the budget is constantly updated and combined with YTD results to project four or more quarters out into the future.
- Whichever model you use, start with your latest YTD results, which will replace the budget for the same period, then add the remaining budget for the year.
- Review the combined results, adjusting the budget as required.
- Benchmark these results against your KPIs and determine what you need to do to achieve the organization’s objectives.
- Update the future years’ budgets if applicable.
- Reviewing and updating the budget and forecast will be much easier and less time-consuming if done with the aid of budgeting and planning software.
Budgeting and Planning Software
It’s easy to become overwhelmed when you’re dealing with numerous and complex data. With the help of software applications, modern-day organizations don’t need to be held back from speedy and effective budgeting and planning cycles—but many don’t leverage the power of automation.
For most finance and accounting professionals, Excel is an indispensable tool. With expert usage and proper planning, Excel can overcome many of the problems mentioned above. At a basic level, it’s easy to use and can produce spreadsheets, reports and all kinds of calculations rapidly.
Approximately one third of companies continue to produce standalone spreadsheets for account reconciliation, supporting calculations, currency conversions and even comments. Excel is the program of choice for these activities. This may be good enough for smaller companies, but as your organization grows, Excel alone cannot keep pace with the growth.
American Health Partners eliminated days of budgeting and planning and rolled out a 12-month rolling forecast, positioning their operations team for success. See how they did.
The Next Generation of Budgeting and Planning Software
Fortunately, there are solutions available that can do the heavy lifting of automating and integrating data collection and manual processes like workflows during the creation process. Thus you are freed to perform meaningful and value-added work.
But can you replace Excel? And, more importantly, should you replace Excel?
Ask any information system professional who has tried to take away Excel as a budgeting or planning tool from users, and they’ll likely tell you how impossible a task it is. And yet, Excel on its own produces results that are only as good as the user is. If the user has bad habits, you could potentially have an error-ridden file. Also, each time you need to create a new version of a file, there is no proper tracking mechanism. Most Excel users will attest to the frustrations of saving over the latest version, or updating an outdated one unwittingly.
The best solution is budgeting and planning software that integrates all the benefits of a modern cloud solution without ever having to leave Excel. If you could have an application that works with Excel in automating workflows for routing and approving, controlling versions and keeping audit trails, wouldn’t you want it? An Excel-based solution will lead to higher adoption rates and a much easier learning curve.
If budgeting and planning are critical to an organization’s success, it’s best to use a tool that delivers more timely and efficient results. Most importantly, you’ll always have a single version of the truth for the entire organization. No more multiple versions of the same file in various databases and users’ directories. No more wondering who’s approving and when, and which is the approved version. Don’t spend all your time planning and budgeting when you can prepare and revise your plans quickly. Free yourself to focus on the important business of running the business.
If you want to learn more about how you can turn Excel into a more powerful tool for your finance team, read our free guide Excel For Th