How Technology Can Improve the Business Budgeting Process

Automation is one of the hottest buzzwords around today. The dramatic improvements in technology over the last few years have allowed any number of tasks to be done automatically. For most organizations this is wonderful news. Automation has improved everything from inventory control to scheduling and accounts payable. This has allowed operations to run more effectively and efficiently. Certainly an important goal for any business. Today, you'd be hard pressed to find an organization that hasn't already (or is in the process of) automating their accounting systems. So, we know the value of automation is there. And yet, when it comes to improving the business budgeting and financial forecasting process, automation is not being utilized on nearly the same scale. Not much has changed in the business budgeting and planning process in decades. In fact, most organizations are still manually entering data into Excel spreadsheets and relying on that information as the base for projections. We all know what that means—forecasts and budgets that take weeks (at best) or months to create and data that is often outdated by the end of the process. This lack of accuracy leads to problems. Strategic decisions could be made on incorrect assumptions. Unexpected dips in sales or cash flow that weren't projected in forecasts could have a dramatic impact on overall organizational health. None of these are acceptable outcomes. That’s where technology can make all the difference.

Technology Steps up to the Plate

Today, many businesses look to harness technology to help them make better decisions. Organizations are determined to be more agile. Any CFO knows market demands can change quickly, and the organizations that are poised to see opportunities can capitalize on them. The old business budgeting and forecasting process makes that very difficult. That's why technology, and especially automation, has become so important in aiding the budgeting and forecasting process. The key with this technology is it allows for budget managers and CFOs to improve two important features. First is the process around the creation of the budget. Technology can build in systems that automatically sync with the general ledger. This helps to keep data accurate not just to the week, but to the minute, dramatically reducing potential errors. Second, automation allows organizations to improve the monitoring and reporting of the business budget and forecast in real time. This is key for the future health of the organization. Improved technology and data automation can create reports that can compare historical data, improve dashboards and generate what-if scenarios. For the organization that wants their key decision makers to be agile and move quickly, technology and automation are an important part of the way forward. And that's where CFOs can be quite effective.

CFOs Go Strategic

As CFOs have begun positioning themselves as strategic partners, they should be the ones driving the charge toward better technology and automation. The main benefit, of course, is this is going to help improve the overall business budgeting and planning process. It will allow for everything from better coordination between departments, to data gathering, modeling and projections. All of this can dramatically reduce the time devoted to the menial tasks behind the budgeting and forecasting process, leading to more efforts towards analysis and improvements. This is something that has been long overdue in so many organizations. But another key factor is that embracing a leadership role can help CFOs establish themselves as key players in the strategic decision-making process. As the conduit between technology and data, CFOs can champion a different way to budget that allows for better and more accurate financial intelligence. The technologically advanced organizations that move to automation and develop smarter ways to budget and forecast will certainly see the benefits in the long run.