7 Steps To A Better Budget

7 Steps

to a Better Budget

Lawrence ServenPresidentXLerant, Inc.

Desired Outcomes

• Faster process

• Fewer mistakes & rework

• More buy-in from the organization

Step 1: Default spreading to last years’ actual pattern

• Divide by 12 Syndrome• Explaining YTD “Timing Variances”

• Base monthly spread on seasonality• Make it the easy default choice

Step 1: Default spreading to last years’ actual pattern

Step 2: Head off “I forgot to budget”

• Managers “forget” to budget line items• Mad scramble to get those missing dollars included

somewhere

• Check box for each line item• Budget not marked “complete” until

boxes are checked

Step 2: Head off “I forgot to budget”

Step 3: Automate standard calculations

• Miskeyed formulas• New rows or columns break formulas• Not all users Excel experts

• Have the system do the calculation based on user choice



• That’s not my number• Minimal operational review of budgets before being sent

to Finance• Finance department left holding the bag

• Built in approval workflow• Electronic “fingerprints”

Step 4: Create an approval flow before it reaches you

Step 4: Create an approval flow before it reaches you

Step 5: Automate yourheadcount interview process

• Complex process• Typically 60%+ of all expenses• Miscommunication, misinterpretation, misunderstandings

• Automate your interview process and have the system perform the work

Step 5: Automate yourheadcount interview process

Step 6: “Baseline & Earmark”

• Hard to see how the dollars are really budgeted• Just comparing “G/L Account 43-5640” budget versus

prior year doesn’t tell you much, but…• …There’s a risk of user error by doing more than

plugging in a number into a G/L account field

• Create baseline budget• Make it easy to add line item detail, layer on

a project, add comments – and make it easy to report on that level of detail



Presenter

Presentation Notes

In this case we’re taking a look at a Project report for the Accounting Department of the Acme Cola Company. <<Go through normal demo script>>


Presenter

Presentation Notes

And here you can see where that project was added to the walk-thru for the Accounting Department. So apart from the $150,000 for Sarbanes Oxley, they’re also setting aside money for College Recruiting that will impact al lot of the Travel related accounts, and they’re also setting aside money for an upgrade to their accounting system. Now maybe none of this special spending will be approved, but at least the executives reviewing these budgets will know what the money is really being requested for. And that alone can completely change the dynamics of the planning process – and transform it from an Accounting exercise to a Business Management Exercise. <<Run Poll>>

Step 7: Shorten the budget cycle

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For more information

Documents

7 Steps To A Better Budget