Budgeting is at the core of every organization, but practices around it vary widely. More often than not, budgeting is considered an entity that’s separate from other operations. The organization may use heavy budgeting tools alongside other systems, or the numbers are crunched in Excel spreadsheets using different methods. Entering and comparing data across multiple systems and spreadsheets requires resources.
Data can also be easily managed using an agile budget tool that is part of a knowledge management process. In this case, it covers the needs of collecting, storing, and reporting budget data.
For budgeting to become a natural part of the information management and financial administration of the company, the software should complement daily activities in the best way possible.
Deploying a custom application in the company’s IT environment or in the cloud is a great solution. This enables the integration of the budget tool with the rest of the company’s systems and data warehouse, as well as its inclusion as part of a BI solution.
A resilient budgeting tool offers endless possibilities instead of rigid structures.
Operational efficiency is improved when integrations are bidirectional: The actual numbers are automatically updated in the budgeting tool, and the entered budget or forecast data are automatically updated in the BI solution of the company, such as Power BI reports. If the company doesn’t already have a data warehouse, it can be built alongside the tool as a light or comprehensive solution. In addition to budgeting, rolling forecasts can be entered into the system. When forecasts are archived in a data warehouse, reports can be used to track past forecasts and monitor their accuracy. Machine learning can also be used to generate forecasts.
Reliable, real-time data without typos – a utopian dream? Not really. In addition to streamlining processes, a budgeting application is a great solution for data validation. A custom tool can be designed to guide data entry in a unified way. Instead of having data scattered in different places, it is always available in the same tool and view. At the same time, data critical to the profitability of the business are validated, and the errors arising from manual data entry are mitigated.
Depending on the industry and business focus, production and employee-related expenses and data flows vary between organizations. This is another reason to customize the tool, as the data entry structures can be adjusted and customized according to the organization’s needs.
A resilient budgeting tool offers endless possibilities instead of rigid structures. When technology doesn’t rely on pre-built templates and structures, workflows and data entry processes can be customized and new functionality can be developed even after deployment. There are also cost savings, as the application is owned by the company, so there are no monthly license fees, and users can be added at no additional costs.
Budgeting technology is constantly evolving, with machine learning playing an increasing role in the development of forecasting. However, even the most advanced technology needs the support of quality business data. That’s why we recommend establishing clear data collection and reporting practices, and making budgeting an integral part of information management and continuous improvement using historical data.
Want to learn more about how we can help optimize budgeting? We’d be happy to tell you more, contact our experts.
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