The end of the year is, among other things, the time for creating numerous analyses, reports, and forecasts. Before you start budgeting for 2021, learn more about techniques and methods that will improve the process. See how to effectively process data and create a clear and effective action plan.
In our article we will answer the following questions:
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What is budgeting?
Budgeting includes planning, creating, and approving the budget in the company, as well as its control after implementation. This process usually occurs before the start of a new billing period. It is an element of accounting and, above all, effective business management. This process has gained popularity and is carried out by many companies of all sizes. However, it is most popular in larger businesses and corporations. It supports the achievement of the set goals and better control of the team’s activities.
- Development of assumptions
- Develop a budget
- Agreement and approval of the created budget
- Control of budget execution within a given period
- Reacting to the results of budget control
The most important functions of budgeting:
- Provides project managers or supervisors with information on the progress of tasks. It can be the basis for assessing the profitability of projects and the implementation of team tasks.
- Ensures compliance with objectives across the enterprise.
- Motivates the team to achieve its goals.
- Allows you to assess the degree of implementation of activities.
- Mobilizes planning for a given period.
- Provides the necessary data for the development of the company and the creation of incentive-based systems.
What key problems may occur in the budgeting process?
In many companies, the budgeting process has been conducted in the same way for years, which is not necessarily a good thing. Commonly, it can be very time-consuming and quickly becomes outdated. Such actions are ineffective. We realize that planning, creating, and controlling the budget are difficult tasks, during which many problems and inaccuracies can occur. However, proper planning can bring visible results and have a positive impact on the company’s income.
Action without a plan
Although budgeting is a process that repeats in the company, the activities related to it should change almost every year. This is related to the company’s development, change of goals, assumptions, and priorities in business, market situation, changes in procedures, and many other factors.
If we’re starting budgeting for the first time, we can get confused – this is not a surprise. Many companies choose to create instructions for this process – it is certainly a very good step. However, it should be considered that such instructions should be supplemented and modified regularly, as it may become obsolete very quickly.
When we operate without plans, many inconsistent, long, and illegible documents may arise. It is worth developing a method that will allow us to create reliable, standardized reports and analyses that will be used by many people. In this case, the budgeting process can be supported by systems for creating analyses, reports, and control, such as the Intense Platform or Business Intelligence.
Systems supporting the budgeting process
Thanks to systems supporting business management, you can create deep budgeting structures, use various layouts of sheets, create budget implementation schedules, define specific elements, conduct an active analysis of the implementation of budget plans, automate certain processes, and define your own calculation mechanisms.
Documents created using the Intense Platform and Budget Manager are standardized and legible. These programs allow for the integration or acceptance of various data and files in the online and offline system. Intense Workflow allows you to work with documents to accept, verify, make corrections, revise, or record.
How does the automation of the budget creation process work?
Unfortunately, another problem that hinders the implementation of effective budgeting in the company is communications in the team that is poorly functioning. Often, budget control tasks are overlooked by managers, which can lead to cost valuation errors.
It is worth implementing a system that will allow you to accept certain points quickly. Alerts that can be set from the Intense system will certainly help. They will be displayed as notifications or sent as e-mail messages. Their generation can be automated, which will certainly improve work and improve information flow.
However, when working on budgeting, you can automate many more activities.
Automating certain processes will allow us to:
- minimize the risk of errors
- shorten the time spent on preparing reports and analyses
- react quickly to any errors
- make changes regularly
- maintain the structure of documents
- maintain a uniform appearance of reports
- integrate files and documents from different systems
How to create legible reports and save time?
Automation of budgeting processes works well in small and large companies. Systems that facilitate the process of establishing budget structures make it possible to introduce this process to a business, all while using a smaller number of working hours. Active analysis of the implementation of budgets can take significant time, so using the system will certainly optimize your activities.
Incorporations and large businesses, the use of software that streamlines the creation of documents, allows you to expand budgets with your own elements, and define your own calculation structures is almost necessary for successful budgeting.
Establishing the budget structure, particularly when using templates and Budget Manager systems, requires attention. However, you won’t have to repeat many steps. Budgeting work can also be simplified by setting formulas which will make it easier to make changes in the future. Thanks to the described function, all reports and analyses will be flexible and personalized.
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