Budgeting Software with Automatic Spreading (Budgeting Series)

This article focuses on budgeting software, specifically zooming in on the automatic spreading functionality.

Budgeting with Automatic Spreading

Budgeting software is one of the most fundamental and critical tools for managing your money. Think about all of the time and energy your company allocates to budgeting. I think about my recent car investment and all of the costs that come with it, including car insurance. I feel extremely overwhelmed just thinking about it, but knowing that there is a simple solution to budgeting calms my anxiety. Do you feel overwhelmed at work? You may feel like this if you are punching in your budget data manually. If you are working toward a financial goal or you are working with limited money, finding an easy way to budget will benefit you at both a personal and organizational level. In this article, we will be covering the first topic of our budgeting series where I will be focusing on an important budgeting need that a budgeting software can solve with corresponding features such as automatic spreading.

Nearly 90% of all businesses still rely on Microsoft Excel for homegrown budgeting models. This application is easy to use because of how prevalent it has been, but as mentioned in previous articles, Excel can only handle so much. Excel was not designed to be a data warehouse. If you are entering your data manually, there is a solution for you.

Let’s get into automatic spreading or “seeding.” There are many benefits to automatic spreading. As a functionality solution, automatic spreading makes budgeting faster, convenient when using budgeting applications that have Excel add-ins, easier to input your data with its default templates, and it also saves you time by replicating data from the previous year. Surprisingly, many companies are not using this tool because they do not know that it even exists.

Whether you are budgeting, forecasting, or modeling for your organization, you will need projected numbers and historical figures, so that you can create a plan to manage business challenges and opportunities in the future. Budgeting with an automatic spreading function enables the user to spread a value that is typed into a period of time, typically 12 months. Depending on what the user defines, the user can evenly spread a value over each quarter, season, or any default period of time based off of last years’ trend. For example, if you are using an “even” spreading functionality, type in ‘12000’, and set it to 12 months of budgeting, the function will automatically place “1000” into each cell versus the user having to type it in manually. You can also set the function to quarterly spreading, which will disperse the amount into January, April, July, and October only.  “Seeding” rules are often used to create a baseline data for estimating and forecasting or to create a starting point from which to review data. For instance, a forecast can be seeded with budget data for the same period or seeded with actual information from the prior time period. If you are more of a visual person, tool like these sometimes comes with graphs so you are able to recognize the trends and also compare your year-to-date actuals to next year’s graph. Your company will come up with an annual baseline budget and then, automatically spread that based on historical trends. This function is usually found in the budgeting application.  There is also a way to modify and adjust manually, but automatic spreading is a useful way to come up with a starting budget or forecast.

There are many technology tools and options for companies that immensely enhance your budgeting tasks. These tools will give you an awareness of what is going on with your money, the ability to organize your spending and savings, the ability to communicate with your partners about goals, to save for expected and unexpected costs, allowing you to better control your money, and the list goes on. Budgeting also allows you to predict or estimate a future trend or event. Forecasting knowledge is important for businesses to judge any sudden expense that can arise in the near future.

Like most things in the modern world, budgeting has moved to the web. Web-based budgeting is relatively newer, and as mentioned above, its options provide users with the same output and company information, but you can also access data and budgets from anywhere where you connect to the Internet. Web-based budgeting continues to build momentum now with some tools offering direct write-back to select Enterprise Resource Planning (ERP) systems. It can be more cost-efficient to go with web-based budgeting when it comes to licensing if your budgeting team is comprised of several users. Solver offers a web-based budgeting and forecasting module as part of the comprehensive suite of BI modules.

Budgeting systems provide several facilities to better manage and control the forecasting process. For example, there are various types of input sheet methods where businesses can capture budgets for profit and loss, balance sheet, cash flow, payroll, revenues, capital expenses, and more. Also, prescriptive analytics allow businesses to set initiatives and let the budgeting software monitor cash, sales, profit, and other indicators and alert management teams with prescribed actions based on business foundation. Lastly, a proper budgeting and forecasting system can allow more time to be spent on reviewing data. Built-in tools in the system help simplify and streamline the planning process.

Whether you are running Microsoft Dynamics or something cloud-based like Netsuite, Intacct, or Acumatica, finding a budgeting solution to enhance your ERP systems can be a difficult process. As you explore the best budgeting solution for your organization, you will most likely have questions, but I am hoping this article will give you a better understanding of functions such as automatic spreading that will help you and your team to effectively create financial plans for the future. The next topic of the budgeting series will focus on budget consolidation in multi-entity organizations. Solver offers Excel and web budgeting stand-alone solutions or as part of the comprehensive suite of BI360 modules and would be happy to answer any questions and generally review BI360’s easy-to-use Planning solution for collaborative, streamlined decision-making capabilities.

 

Leave a Reply