Budgetary planning and control is the most visible use of accounting information in the management control process and across the organisation. So it's important for finance teams to get it right. Historically, a budget is simply a forecast of expenditures and revenues for a specific period of time. However, as the structure of businesses has become more complicated, the function, scope, and management of the budget has also become more complex.

As a result, effective enterprise-wide budgeting and forecasting is difficult and can be a painful annual ritual. If your company works to a June EOFY, the painstaking nature of the process should be fresh in your mind.  It is not uncommon for line managers and their staff to spend weeks preparing their budget submissions and for central budget managers or accountants to spend even more time consolidating, revising and redistributing budget plans. The majority of the problems encountered with budgeting however, arise from management of the process itself and the tools or lack thereof used.

Fortunately, it doesn't have to be this way. It's possible to take a lot of the complexity out of budgeting, streamlining the process and making it easier for finance teams and cost centre managers. Creating a budget-friendly workplace culture won't just boost morale and employee engagement, it will also free up time for other tasks and eliminate the sense of frustration that too often surrounds this critical business process.

So, what are the keys to achieving a budget-friendly culture? Put simply, this boils down to the following:

•  Ensuring those that input into the budgeting process are involved throughout the process and feel they have ownership of their part and can clearly see how this rolls up to the overall strategic plan.

• Comfort that the budgeting process is logical, accurate, cohesive, efficient and easy to participate in.

With this in mind, finance teams should look to the following tips:

The Budget Process Should Be Efficient, Automated and Easy

Much of the frustration with enterprise budgeting and forecasting processes centres around how this process is managed.  Too often than not, if finance teams are relying on overly complex systems or spreadsheets to manage the process, this will blow out cycle times, lead to accuracy issues and lack of transparency in the numbers.

Automating data integration to form the basis of enterprise planning is a key requirement here. It's important to automate the connection to any enterprise system and data required for planning, so the right data is being retrieved, transformed, validated, and loaded into a dedicated budgeting and forecasting system.  These systems are also known as Enterprise Performance Management (EPM) systems.  The data is then meaningful and stays current at all times.  Good EPM systems should have a range of pre-built data connectors that will speed up development of such a process. Having this type of integration capability reduces manual effort and ensures data is always of a high quality - without the need for any human involvement.

The other key to creating an efficient enterprise budgeting process is to ensure the tool used makes it easy for non-finance people to enter their budget and forecast assumptions and keep track of these, while also providing clear visibility of progress for those in Finance managing the project. Using budgeting software that can be driven by simple point and click from transactional level detail to summarised detail, has in-built formulas and is intuitive to use, goes a long way.  If you're using Excel this will be extremely difficult as version control is non-existent, there's no drill-down on data capability and interlinked worksheet formulas have the potential for errors to creep in.

Cloud EPM Software Better Supports Decentralised Budgeting

To integrate operational budgets and plans with the overall financial plan, input from cost centre managers from across the organisation and regions, in most cases, is needed. Cloud-based EPM software is gaining traction as a great alternative to manage enterprise budgeting, forecasting and planning over outdated spreadsheets and on-premise EPM systems.  The main reason is the sophistication of functionality still provided but with ease of use and management to support a decentralised planning environment.  This equates to no hardware required, users simple access the tool via a web browser, upgrades are usually managed by the software vendor so organisations find they're always benefiting from new enhancements and supporting continuous innovation in the budgeting process.