Guide to Growing Your Business with Budgeting & Forecasting
Strategy, accuracy and automation are essential features in Corporate Performance Management (CPM) software that can make a world of difference for organizations‚Äô budgeting process.¬† When it comes to planning‚ÄĒstrategy, budgeting, forecasting‚ÄĒorganizations can ensure strategic alignment, maximum visibility and streamlined processes with the right solutions.¬†
Additionally, organizations can get the most value from modern planning software if it is user-friendly, safeguards against typical budgeting and forecasting mistakes, and allows for automatic assignments, workflows and approvals.¬† This blog post will describe the benefits of using planning software.¬† Let‚Äôs review three typical planning processes and the potential benefits provided by the right CPM software:
Modern CPM and planning software can carry most of the burden through¬†automating classic bottom-up budget processes.¬† CPM software can automate data integration, saving employees from having to manually load data into Excel.¬† Additionally, through workflows, budgets can be automatically submitted for approval, including a notification to the proper users.¬† These features come in handy as an organization‚Äôs process grows and more people become involved in the budgeting cycle.¬† The right CPM solution will allow for additional budget contributors while maintaining control and oversight.¬† Not to mention, automation will save work hours normally dedicated to creating and reviewing the budget, thus saving money.¬† Unlike with processes that depend on manual input, modern CPM software allows for easy continuation of a process, even with personnel changes.¬† Finally, advanced financial reporting and analysis capabilities will help improve overall budgeting accuracy.
The majority of sales planning still lives in Excel spreadsheets for Sales Forecasts.¬† Furthermore, the mixture of CRM and Sales data makes it very difficult to provide updated forecasts quickly.¬† Luckily, technology can streamline the reforecasting process, providing updated projections as conditions change.¬† Having software that can quickly adapt to changes in the economy and can create multiple budget/forecast scenarios will also ensure organizations are operating with dependable, accurate sales targets.
In addition to financial processes like budgets and sales targets, modern CPM software can make a significant impact in operational planning as well.¬† Modern CPM software will allow organizations to incorporate their strategies and goals into planning software, thus ensuring organizational alignment.¬† In addition to planning, the right CPM solution will also allow immediate insight into the progress of budgeting processes.¬† Through the ability to plan your organization‚Äôs workforce ahead of time, align it with budgeting goals and sales targets, planning software has become an indispensable solution for many growing organizations.
Benefits of Forecasting with CPM Software
Why is forecasting a good practice for all organizations?¬†Here are five reasons:
- A forecast is usually a much quicker process and involves fewer employees.
- A forecast is entered at the general ledger account level while detailed templates, such as personnel templates, are not used.
- A budget is a company‚Äôs intention for the coming year, while a forecast is the most up-to-date expectation of what will happen over the remaining months of the year.
- The budget is finalized prior to the start of the year while a forecast can be created monthly or quarterly once the year has started and actual data can be reviewed.
- Many organizations create multi-year forecasts while budgets are only for the coming year.
While the budget is created one to two months before the year starts, the bulk of it is created up to fourteen months prior to the start of the month. For example, the budget is finalized in November for a company based on a calendar fiscal year, which is a year prior until the next November happens. Meanwhile, a lot can change in the various aspects of an organization regarding the economy, industry, products, competitors, employees, and leadership. A forecast can more accurately influence decision-making.
Companies can impact their bottom line by forecasting on a regular basis. An organization will be much more agile by forecasting monthly, as it can affect the following decisions:
- Expense reduction and tightening up the authority to spend money.
- Employee raises, new hires, and terminations.
- Capital expenditures reductions or increases.
- Strategic planning and modifying initiatives.
A forecast should include the current year actual data for the closed months. It should also allow the departmental managers to modify the amounts for the remaining months.¬†Additionally, copying the budget data to the forecast will allow managers to concentrate solely on changes in the forecast.¬†You can show the prior year actual data as well.
Learn More About CPM Solutions with Solver
CPM solutions contain many features and facets for organizations to manage.¬† From dashboards and reports that allow users to gain insight from the past, to planning and forecasting modules that enable them to gauge the future, more organizations are depending on modern CPM software to make management decisions.¬† For organizations struggling to implement their business strategy, investing in a modern CPM solution is a must.¬† The additional benefits of accuracy, automation and other time and money-saving features will make such an investment worth it.