Improving Budget Accuracy

How can I be more confident in the accuracy of my budget?

If you’ve ever felt a little unsure when presenting the company’s annual budget to your executive management (Did I troubleshoot all the formulas? Did my spreadsheets roll up properly? How fragile is my Excel spreadsheet model?), you’re not alone. According to a recent Centage/IOMA survey, the majority of CFOs are not confident to only somewhat confident in the accuracy of their budgets, due to weaknesses in their budgeting tools and processes.

No one knows better than the CFO the importance of these numbers, upon which critical business decisions relating to the allocation of human, capital and cash resources hinge. The integrity of your budget model and the accuracy of the data are paramount.

Your reputation depends upon it. Yet many small to mid-size companies use spreadsheets for budgeting, unaware that better tools exist that can improve budget accuracy and restore confidence in the budget.

Spreadsheets are terrific personal productivity tools, but using them in a collaborative process such as budgeting poses huge risks.

Errors are common from:

  • Mechanical errors such as flawed typing or incorrectly entered data, which can affect the integrity of an entire model
  • Logic errors, where an inappropriate algorithm or formula is chosen; resulting calculations are flawed, affecting the entire model
  • Omission errors, where critical components are left out of a model entirely. As the number of worksheets grows, the likelihood increases that a critical item will simply not be inserted.

Budget Maestro and Planning Maestro's built-in financial intelligence and business rules completely circumvent the potential for spreadsheets flaws and inaccurate budgets in numerous ways:

  • The software utilizes a centralized database where all data is stored, so all budget preparers work from the same data, all the time.
  • Your data is consolidated automatically. There are no disparate worksheets or separate files for data entry. No batch processing or checking in/out of files.
  • Menu prompts and wizards guide you through the budgeting process and perform calculations for you.
  • Any updates you make to your model and related assumptions are automatically updated throughout the budgeting system. No need to trouble-shoot formulas.
  • Budget Maestro / Planning Maestro is smart enough to recognize and apply the attributes and behaviors of each type of account -- i.e. revenue, expense, asset and liability -- ensuring proper, logical calculations.
  • The software applies the built-in spread methods, depreciation tables, and top down/bottom-up calculations of your choice, without the need to write any formulas.
  • Built-in Accounts Receivables and Accounts Payable schedules allow you to accurately forecast your balance sheet activity and integrated cash flow budget.
  • Reports are GAAP-compliant.

As a result, you can budget, forecast and report with confidence, knowing that your calculations for revenue, expenses, payroll, fixed assets, loans and liabilities, and multi-currency items, are correct and based on accepted financial rules.