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Budgeting_Process_Best_Practices_White_Paper_Solver

The unexpected events of 2020 — and the resulting economic uncertainty — demonstrated that financial leaders across the globe must be able to operate with greater agility. But many finance leaders are still struggling to gain insight into their business futures.

Outdated processes, time-consuming input methods, and overly complex Standard Operating Procedures (SOPs) are just some of the many issues resulting in unclear decision making and a feeling that all future financial plans are simply “guesswork.” Added together, these issues are likely to result in unsuccessful and unrealistic Annual Budgets.

Savvy financial leaders understand that today’s rapidly and drastically changed business landscape requires rapid and drastic changes to the budgeting process in response… but it can be difficult to determine what the best steps are when the future is so uncertain.

If you are ready to transform your Annual Budgeting process to a more agile, more responsive, and more streamlined set of procedures that you can leverage for greater planning confidence, check out these budgeting process best practices compiled by experts.

cash flow trended rolling financial report

Cash Flow report that dynamically displays the past 13 months

What You Will Learn in This Document

After reading this document on budgeting process best practices, you will be prepared to handle uncertain economic futures with greater levels of confidence. You will know what steps to take, and in which order, to set the stage for a successful Annual Budget process – and you will have a good handle on the various approaches you can take for budgeting at your company.

This document is detailed and lengthy, meant to guide you every step of the way through this year’s Annual Budget process and beyond. You may prefer to print out the full document or save it directly to your tablet, so you can use it as a reliable reference piece for the next few months and years.

Ready to get started? Let us begin by talking about why having a strong process matters for your Annual Budget activities and what may be “broken” in your current process.

Year-End Forecast in the Solver Process Manager shows one example of how you can follow budgeting process best practices to stay ahead in uncertain economies

Situation Analysis and Year-End-Forecast sample budgeting process

Understand the Power of Strong Process Management

Processes are powerful. In fact, effective processes often form the essential difference that gives many of today’s leading companies their competitive advantage. When implemented properly, a strong process will lead to strong action and strong results.

Most companies can strengthen their Annual Budget process. Doing so leads to numerous benefits, including:

  • Faster, more informed decisions
  • Improved accountability
  • Significant resource and time savings
  • Revenue and profit acceleration

Do those benefits sound like a fantasy? They are actually relatively easy to achieve – as long as you and your team are ready to put in the work focusing on budgeting process best practices that help you develop strong processes.

Best practices recommend that you have:

  • Well-defined Corporate Performance Management processes
  • Clearly stated process owners
  • Precise due dates for tasks and/or processes
  • Transparency – meaning that processes are easy to access and view by stakeholders
  • Full accountability

This document will explain how you can set up a strong Annual Budget process for your company – but let us first look at the obstacles you may come up against while trying to set up your own processes.

budget accuracy comparison

Compare budgets from prior years to analyze ACCURACY before the new budget process.

Find Out Now: Is Your Annual Budget Process Broken?

No matter where your company is located globally, your finance department shares at least one commonality with every other finance department in the world: you are extremely busy.

Due to a massive workload, constantly looming month-end-close deadlines, and a staggering number of manual processes, finance departments often delay process and procedure reviews or updates. This means you may be maintaining cumbersome, outdated standard operating procedures for far longer than necessary.

Traditional financial planning processes rely on analyzing historical records and trends, entering data manually into Excel, and running quarterly reports on what already happened to see what might come in the future. These processes are slow and, to be frank, today’s finance departments do not have the time or economic certainty to place much trust in sluggish processes.

Working in today’s rapidly shifting economic environment, slow processes are likely to “break” your budgeting process.

Is Your Budgeting Process “Broken?”

Find out if your budgeting process is broken when you check to see how many of the following warning signs your process exhibits:

  • You are using Excel almost exclusively
  • You do not have a central database for Annual Budget data
  • You run into broken links too often for comfort
  • You have limited security due to the ability to freely share Excel files
  • You have multiple versions of the same Annual Budget and have troubles determining which one is the final one
  • Your users and stakeholders miss deadlines (lack of accountability)
  • Your process delivers limited, if any, guidance on goals and strategies that impact the annual plan
  • Your input process does not allow supporting details to be entered for context
  • You experience a lack of communication between departments, leading to siloed planning in a synced-up world
  • You suspect that some department leaders may be focusing on their own interests and participating in gamesmanship or sandbagging

Did any of these warning signs sound familiar? By using a Corporate Performance Management solution like Solver, you can easily fix these problems with:

  • A cloud and web browser-based platform that encourages full collaboration
  • Line item detail and comments for context and other information
  • Capture and display of strategy and KPIs for clear guidance
  • Process management and workflow tools
  • Protected web forms for solid data security
  • Automation for scenarios and more
  • Top down/bottom up planning flexibility
P&L variance report with charts and KPIs profit & loss

P&L variance report with modern design gives users quick KPI highlights with charts.

9 Budgeting Process Best Practices

The key to solving issues and fixing your “broken” Annual Budget process is to be prepared to accomplish more agile, streamlined, and modern budgeting. Best practices suggest that you begin your preparations with clear steps, to be completed in precise order.

In the next sections, you will learn what each of those steps are.

1. Begin Your Preparation Checklist

Preparation_Checklist_Process_Manager

Make sure you complete a preparation checklist before starting on your annual budget

Success is much more likely if you have prepared for a successful outcome. When you feel you are ready to transform your budgeting process to achieve success in times of economic uncertainty, simply return to this section and write down each step in this Preparation Checklist.

Pave the way to success for your Annual Budget by following these steps:

  • Finalize and communicate your strategies, goals, timelines, and targets
  • Create a “project plan” for your Annual Budget
  • Complete an end of the year forecast (see the next section for details)
  • Empower managers with the ability to manage their own department financials
  • Modify and test any templates, and make sure they are available to all team members who need them
  • Add any new users and verify their security settings
  • Confirm all data is appropriately accessible
  • Start early – we all know that the early bird gets the worm!

You can do all this manually of course, but it is much easier and faster to complete these steps using a purpose-driven tool like the Solver Process Manager.

The Solver Process Manager makes it easy to create checklists, assign tasks to various personnel, and enjoy full transparency and access with secured, cloud-based checklists that are readily available to authorized users.

2. Complete Year-to-Date (YTD) Analysis and Forecasting

financial management software dashboard

P&L report with actual, budget, last year and variances.

To know where you are going, you must start by knowing where you are. In a time of economic uncertainty, this is easier said than done – but it is certainly not impossible.

When you take a deep look at your current performance, you can then gain a reasonably accurate initial glimpse into your future by forecasting potential scenarios and performing a fundamental analysis.

Not sure where to start with this process? Here are some tips drawn from best practices recommendations:

Look at Your Current Performance

  • Have department managers review their financials
  • Understand current and future headcount needs
  • Determine Sales team productivity
  • Dive into Marketing effectiveness

Run a Realistic Forecast

  • Perform a 7+5 forecast in August (with 7 actual + 5 predicted months)
  • Set corporate strategies and goals for next year (see the next section for details)
  • Forecast through next year to provide vision and insight
  • Check your forecast accuracy and identify any potentially overlooked areas

Perform a Fundamental Analysis

  • Start your analysis now to ensure that you are ready for your Annual Budget process in time
  • Review assumptions and the accuracy of your prior year’s budget
  • Review all contracts, especially ones for recurring revenue
  • Assess how current and future strategies may impact your new hires and promotions

When you are ready to begin your YTD Analysis and Forecasting, a Corporate Performance Management solution like Solver can assist by delivering a range of easy-to-use templates and reports, including:

3. Set Your Strategic Goals

budget strategy target goal KPI

Enter strategies and then enter the associated goals.

One of the most important budgeting process best practices tasks lies in setting strategic goals for the next year. This is a task largely for Executives and Board members, who must set goals based on strategies and initiatives and take various factors into account.

When setting strategic goals, Executives and Board members should make sure to carefully consider:

  • Revenue growth
  • Cash flow
  • Profitability
  • Investments
  • Unique critical financial areas

Once strategic goals have been set, they must all be clearly communicated to the management team and special care should be taken to ensure that all managers are on board. All feedback should be taken in by the Board and Executive team, with willingness to modify the goals as needed.

After goals are agreed to, the Executive team should work with the management team to set specific departmental goals based on corporate targets. Both groups are likely to gain more from this exercise if they concentrate on the “how” when determining initiatives, instead of simply focusing on the “what,” as they may have done in prior Annual Budgeting cycles.

Note: Budgeting process best practices recommend that Annual Budget planning should NOT start until this last step is finalized and agreed to.

It can be difficult to set executable strategic goals in times of deep economic uncertainty, but a Corporate Performance Management solution like Solver can help by providing various reports and forms that help you capture multiple scenarios (e.g. “High,” “Low,” “Mid”) and communicate your strategy and goals clearly and concisely.

When assessing a Corporate Performance Management (CPM) solution for your strategic goal-setting process, ensure that the tool you choose includes, at the very least:

budgeting software dashboard for businesses

KPI report for analysis of budgets vs strategic goals.

4. Select Your Best Budget Input Process

Once all prior steps and preparation tasks are complete, it will be time for you to officially begin your Annual Budget process.

You have two ways you can approach your budgeting process: top down or bottom up. It is important to note that neither of these approaches is “better” than the other – they each simply address different ways of looking at the same budget planning puzzle.

In best practices organizations, both methods are used:

  1. First the office of finance creates the top-down budget and disseminates it to department managers as a “baseline” budget.
  2. Then each department makes a bottom-up budget, either by revising the top-down budget or as a new budget version in the system. The latter is recommended, as managers can then later compare the two versions and see where there are differences.

Top Down

The “top down” budget process focuses on modeling expected outcomes at the senior management level and working down to the details from there. Top down forms a more “high level” view, which can be useful if departments don’t have the time or precise details to build a “bottom up” budget.

During situations of economic uncertainty, top down input can help senior management save significant time in generating a budget. By using top down methods, you can create an initial budget that reflects your initial assumptions, and then regenerate your budget quickly and repeatedly in response to fluid, rapidly changing circumstances.

Three important areas to focus on in a top down input method would be:

1. Workforce Modeling

payroll workforce headcount budget input

Enter key information and let the form calculate monthly salaries, benefits, taxes, etc.

In this modeling scenario, you would generate an analysis of your future workforce needs. In uncertain economies, it is of the utmost importance that you understand precisely how much staff you can and should afford, and that you know which staff members and functions are critical to your strategic goals.

Workforce modeling helps you achieve clarity on your workforce requirements by challenging your assumptions with hard data and presenting crystal-clear Profit & Loss reports based on specific workforce drivers.

2. Profit & Loss Modeling

Profit and loss P&L forecast revenue expense driver breakback

Enter target Net Income and the form’s algorithms automatically creates the forecast.

In this scenario, you would enter in your profit targets and then break them back into Revenues and Expenses, so you gain a clear understanding of whether or not your profit targets are realistic.

3. Cash Flow Modeling

Power BI dashboard liquidity cash simulation forecast

Simulation of cash flow with sliders where the user can increase/decrease any component.

In this scenario, you can use your Profit & Loss and Balance Sheet items to arrive at a target Cash Flow that can help you gain planning insight. The benefit of utilizing a scenario in this process is that you can easily reiterate your Cash Flow expectations based on your evolving strategy and likely outcomes.

Simplify your top down budget input process with a range of top down, driver-based forms from Solver, including:

corporate forecasting software dashboard

Input of expenses at the GL account level. Includes line item detail, spreading, etc.

Bottom Up

Bottom up budgeting includes more details and departmental input and can open the door for Zero-based budgeting at the micro level, which may be of significant benefit during times of uncertainty. The detailed numbers that go into a bottom up budget can help departments and management gain precise insight into exactly where spend is going and revenues are coming from, helping you to tighten margins while planning necessary expenditures with confidence.

There are two approaches you can take for your bottom up budget input. Of course, choose the method that works best for your needs.

1. Waterfall Approach

In this methodology, certain stages must be completed before others can be started. First, your Sales and Marketing plans will be completed, including your pipeline and headcount/expense data. After that, you’ll move to your Revenue plan.

Once all these plans are completed, you will have the data you need to accurately plan your department budgets, which you can review and revise as needed once they are finished.

The Waterfall method is more time consuming, but it has the potential to deliver deeper insight due to its comprehensive, staged approach.

2. Concurrent Approach

In this methodology, all departments enter their plans concurrently, based on strategies and goals.

As plans are entered, they are consolidated into one master version, which is opened up for review and revisions as needed.

The Concurrent method is faster to complete, but it may result in more superficial insight. This is not necessarily a bad thing. In fact, superficial insight may be more beneficial than taking the time for a deep dive if you are dealing with constantly changing numbers that you expect to update.

Whether you choose the Waterfall or Concurrent approach, a Corporate Performance Management solution like Solver can help make your bottom up budget input faster and easier with a range of input forms and workflow tools.

A good Corporate Performance Management solution should provide budget input resources for:

P&L estimate report forecast budget profit & loss

Compares actual to forecast and budget, and compares full year budget to actual + forecast.

5. Plan Carefully in Times of Uncertainty

Of course, there is an elephant in the room here as we discuss budgeting process best practices. Namely: Can a company expect accuracy from an Annual Budget process if they are basing all their numbers and planning on what seems like guesswork?

The answer, you will be pleased to learn, is YES.

In fact, following budgeting process best practices is even more important in times of economic uncertainty, or in times when it feels like you are relying on “guesswork.” Only by using the scientific method of critically thinking about the possibilities, modeling scenarios based on your assumptions, and using those models to plan for a range of possible outcomes can you prepare for success in an uncertain future.

In business, the future is often uncertain. A global pandemic is not the only economic uncertainty you will experience throughout the life of your company – in fact, it is simply one of many unexpected situations, including:

  • Heavy M&A activity
  • Paradigm shifts
  • War
  • Recessions

The key to “weathering the storm” no matter what the future may bring, lies in adequately planning for all possibilities. Therefore, best practices for your budgeting process should include the following stages:

  • Seek feedback from business units prior to setting targets.
  • Plan “static” items early and delay highly variable items. (It will be easier to guess the future with more accuracy when the future is closer.)
  • Allocate most of your time to high value areas, such as Revenue and Cash Flow.
  • Consider starting off with quick, high-level budgeting and then moving to monthly forecasting. This can lead to higher accuracy in your budgeting process.
  • Use contingencies for budget assumptions (e.g. if/then).

The great news is that, if you plan and prepare properly to transform your Annual Budget process, you can achieve phenomenal results, even in times of economic uncertainty.

kpi report budget last year forecast variances

Detailed KPI report with actual and budget variances.

6. Enjoy 4 Key Outputs of a Successful Annual Budget

As you know, you must make your own success. By following the budgeting process best practices in this document, you will be well prepared to ensure that your Annual Budget is successful even in times of economic uncertainty.

You will know you have transformed your Annual Budget process for the better when you achieve these 4 key outputs:

  1. Your managing team joins together in a “rally cry” to meet operating targets with a monthly review that keeps them accountable and on track for success.
  2. Your plans are aligned across the company and are fully executable on both a macro and micro level, and you achieve outcomes for the company and by department.
  3. You measure and address performance continuously using Key Performance Indicators (KPIs).
  4. You see positive results from your regular budget reports and analyses, including:
    • Profit & Loss, Balance Sheet, Cash Flow
    • Key Performance Indicators
    • Workforce plan
    • Departmental budget details (revenues and expenses)

With a market-leading Corporate Performance Management solution like Solver, you can track your success using targeted budget reports and KPI tools, including:

Budget_Process_Analysis_Process_Manager

Analyze your budget with reports and dashboards

7. Treat Your Annual Budget Like a Project

Considering the level of continuous measurement, tracking, and accountability involved in the budgeting process best practices covered in this document, you may think that the modern and resilient Annual Budgeting process sounds more like project management than pure financial management.

Guess what: It is!

In times of uncertainty as well as during “business as usual,” you have the opportunity to streamline your budget process, improving both accuracy and agility, if you follow good project management discipline.

Therefore, make sure you follow these best practices during your planning process:

  • Create a clear project plan using the Solver Process Manager or another tool.
  • Maintain short cycles for deliverables.
  • Hold stakeholders accountable for delivering by deadlines.
  • Complete weekly management team reviews on progress.

Make sure that you do not stop there. You must also keep a close watch on what the shifting numbers and weekly reviews indicate.

8. Always Challenge the Numbers

One of the best methods for maintaining Annual Budget planning agility is to keep all stakeholders engaged with the budget at all times. This means that your entire management team should stay active in not only meeting their own goals but should also be active in helping other departments across the company meet their goals better.

Increased cross-departmental engagement can reduce potential gamesmanship, sandbagging, and other competitive tactics within the company, helping the entire enterprise achieve success in the best, most holistic manner possible.

Encourage cross-departmental teamwork by having everyone challenge the numbers:

  • Managers should review their own department as well as interrelated departments.
  • Be sure to set up isolated initiatives to accurately assess granular incremental return (ROI) and track initiative results closely.
  • Question everything to ensure that everyone fully understands and agrees to the final budget and strategic tactics for meeting budget expectations.
  • Create different scenarios and assign probabilities to each. Try to align scenario probabilities to Board expectations, such as in the following examples:
    • High growth: 60%
    • Special event (like acquisitions, recessions, etc.): 20%
    • Break even (e.g. because of likely recession): 20%
Scenario_CFO_Board_Planning-SubscriptionSales-1

When you plan scenarios and challenge the numbers, make sure you keep a careful record of what you decided.

As you will see, using the tools included in Corporate Performance Management solutions like Solver will make challenging the numbers easier:

9. Invite Executive and Board Feedback Early On

These budgeting process best practices should help your finance team and the entire company create a better budget, more quickly and accurately than you would if you were using the “broken” processes and methods we mentioned earlier – but remember that creating the Annual Budget is only one part of your total task.

In times of economic uncertainty, it can be nerve racking to present your finished budget to the Board and Executive team and to elicit feedback from them. By following the best practices outlined throughout this document, you can improve your process, your outcomes, and your confidence levels… and with these final tips, you can also improve the success of your Board approval process.

Here are three tips that can help you better ensure that your Annual Budget will be approved:

  1. Be prepared with all of the numbers, as well as the “how” and the “why” behind those numbers.
  2. Include the Executive team and Board members early on in the process, using active communication to minimize noise at the approval stage.
  3. Accept Board and Executive challenges to revenue or expenses if you know that the “how” of achieving them can be developed once the budget is approved.

A Corporate Performance Management solution, such as Solver, can help you ease the Executive and Board feedback and approval process using a unique combination of software features and capabilities, including:

  • Executive comments
  • Department feedback
  • Status tracking
Budget_Comments_Resolutions-1

Plan for various scenarios, so you are more likely to be prepared for whatever happens.

Get Started Today with a Sample Budget Calendar

Ready to get started now? Smart choice.

Here is a sample budget calendar that you can use to begin setting up your streamlined process. Feel free to model your own calendar after this one. Make sure to include all applicable stakeholders and realistic deadlines to encourage full accountability.

Budget_Calendar_Example_Solver

Using the Solver Process Manager, Budget Managers can easily and quickly create reasonable budget calendars that hold staff accountable to deadlines.

Now Is the Time to Start Your Annual Budget Process

As they say, there is no time like the present. When it comes to crafting your Annual Budget in times of economic uncertainty, this advice is more important than ever before.

To ensure the most successful outcomes for your Annual Budget process, follow these summarized steps, in order:

  1. Start preparing now
  2. Execute your Annual Budget planning like any other internal project
  3. Challenge all assumptions, so you can align goals and expectations
  4. Communicate with all stakeholders at every step
  5. Ask questions early

And, of course, make sure that you ask for help when you need it so you can stay on track when you run up against unexpected obstacles.

For that last one, and for every step along the way, the budget planning experts at Solver have got you covered. With Solver, you will have access to hundreds of financial planning templates and reports, plus our extensive template glossary and experienced staff who are always happy to share their expertise.

If you have questions about how you can streamline and improve your Annual Budget process with budgeting process best practices, our support experts are ready to help you get the most out of Solver’s flexible and robust financial planning tools. Solver is committed to helping you set up your Annual Budgeting process for success, so you can maintain more certainty about your business’s financial future.

Reduce uncertainty and fix your budget – here’s how.

Blog header image showing a woman with binoculars for the Solver blog on how to use monthly rolling forecasts to gain insight in unpredictable times

According to the 2020 Wisdom of Crowds Enterprise Performance Management Market Study, adoption of enterprise management software increased in 2020. Nearly half of all surveyed organizations now use enterprise performance management (EPM) / corporate performance management (CPM) software, and 78% of survey respondents rated this software as “critical,” “very important,” or “important” to their organization.

Of course, enterprise and corporate performance management software is always useful for Finance and Operations planning, especially during the annual budgeting process, but in a time of economic uncertainty, the budgets that your organization created 12-18 months ago can seem stale and out of date.

Flexible monthly rolling forecasts, which are almost exclusively found in market-leading EPM / CPM software, help keep your Finance and Operations planning fresh and on track throughout unpredictable times, so you can enhance your budgeting agility and maintain your competitive edge.

View templates for forecasting and other critical planning processes.

Why Use Monthly Rolling Forecasts?

“Enterprise performance management software can help organizations manage short-term uncertainty and plan their strategies for the ‘new normal’…” – 2020 Wisdom of Crowds EPM Market Study

Rolling forecasts empower business leaders to continuously plan for the future with insight into the next 12-18 months. Using up-to-date historical data, rolling forecasts can help cultivate more agile organizational planning that helps illuminate how short-term disruptions and adjustments may affect long-term objectives.

In essence, monthly rolling forecasts help companies plan their strategy to overcome economic uncertainty by providing a continuously updating glimpse into the potential future.

Compared to the typical annual budgeting process — which relies heavily on assumptions generated in the past and marches steadily into an unknown future somewhere past the “fiscal cliff” — it is clear why rolling forecasts are critical to success in uncertain times.

Rolling Forecast Usage Is Likely to Increase Due to the Events of 2020

The Wisdom of Crowds study reports that 64% of respondents use rolling forecasts today, and 16% say they have now replaced annual budgets with rolling forecasts (an increase of ~15% YoY). Considering the ongoing disruption caused by COVID and global economic uncertainty, the adoption of monthly rolling forecasts is likely to increase more in 2020.

Would rolling forecasts be right for your organization? Here are a few reasons to consider utilizing this critical tool as a budget manager or executive:

  • Monthly rolling forecasts deliver timely insight based on the recent past.

When you planned your 2020 budget, no one had heard of a coronavirus – and you certainly did not expect a coronavirus to shrink the GDP, disrupt global supply chains, or quarantine your workforce in home offices. It is time to recalibrate your numbers.

Now that all this has happened, a monthly rolling forecast can help you strategize what to do next, whereas that annual budget will offer little to no help.

  • Rolling forecasts can report on current usage of allocated budgets.

Considering the myriad changes listed above, there is a high probability that your company expenditures have strayed significantly from expectations. For example, your company has probably spent less on conferences and travel. Can you re-allocate those budgets?

Department managers may be hesitant to initiate a conversation with you about the amounts still available in their allocated budgets, but a monthly rolling forecast can shine light onto usage (or lack thereof), so you can plan properly.

Why Not Use Rolling Forecast Tools Built into Your ERP System?

If you are running cloud ERP systems like Microsoft Dynamics 365 Finance, your company has a great accounting system. So, why not use the rolling forecast tools built into your ERP system? Simply put, there aren’t many available. That is why more than 90% of the organizations create their forecast models outside their ERP in manual Excel spreadsheet models.

Now, if it fills your needs, there is cash-flow forecasting and sales forecasting included with some ERP systems, including Dynamics 365 Finance implementations, but no forecasting is available on Government Community Cloud (GCC). If you are a Government agency or you want to use rolling forecasts for a wide variety of Operations and Finance areas, it is a smart idea to invest in a purpose-built, flexible and robust market-leading corporate performance management solution that can provide you with the in-depth insight you need immediately.

Next year’s annual budgeting process is here now, yet leaders across the globe still have few answers or concrete plans to address our uncertain future. The best way for you to plan your organization’s budget is to develop your own glimpse into the future… and the best way to do that is with monthly rolling forecasts.

Make Smarter Decisions Now Using Monthly Rolling Forecasts from Solver

With the current situation, you cannot wait to “see what happens.” Forecasting templates from Solver help you get started with this helpful tool quickly, so you can take a proactive role in your Finance and Operations planning processes.

Rolling forecasts from Solver are fully integrated with a number of ERP systems, including Microsoft Dynamics 365 Business Central and Microsoft Dynamics 365 Finance (f/k/a Microsoft Dynamics 365 Finance & Operations), and they provide an easy way for you to look forward into what you can expect next year, so you can plan appropriately.

 

Discover the facts on forecasting during economic uncertainty with this handy how-to from Solver.  

hybrid cloud

There are more than 200,000 companies running on-premise ERP systems from Microsoft, Sage, SAP and Acumatica world-wide and many are not planning to move to the cloud yet. However, if you are one of them, this does not mean that your company can’t start taking advantage of modern cloud-based reporting solutions today to drive better and faster decisions for yourself and your management team!

Hasn’t Cloud-based reporting for on-premise ERPs been available for a long time?

Yes, vendors like Prophix, Solver, Vena, Adaptive Insights, and Planful (formerly Host Analytics) have offered both cloud-based financial reporting and budgeting for years. However, all of these vendors have typical corporate performance management (CPM) architectures that require data to be loaded from the on-premise ERP and into the cloud CPM tool before the user can run reports. 

The process requires a “refresh” of data from the ERP database into the CPM database which means that the data users see in reports is not real-time. This also mean that the drill-down on any number is only as detailed as the lowest level data that was loaded into the cloud CPM database. 

Your executives are often ok with this because they want to wait on their report analysis until the accounting team has closed the books. However, the accounting team that is posting transactions in the ERP system almost always prefers live ERP reporting because they want to immediately see the impact of journal entries in their reports. They don’t want to refresh data into a CPM reporting database first, and then wait one minute, ten minutes or significantly longer to run reports after the data has been transferred to the CPM tool.

How do I get true live reporting for my on-premise ERP GP data?  

The obvious answer is that you use the report writer that natively comes with your ERP system such as  Management Reporter, GP Report Writer, Smartlist or SQL Reporting Services (SSRS). However, at best, it would be safe to say that these tools have aged “gracefully,” and they are just not comparable to many modern cloud reporting tools.

Key weaknesses of on-premise report tools include:

  • Not particularly user-friendly for accounting staff to design reports.
  • Lack of easy and professional formatting.
  • Typically requires VPN or Terminal Server to connect to the ERP in order to run reports from outside the office network.
  • Maintaining multiple report writers for different data (e.g. for formatted financial statements versus sub-ledger transaction reports).

In order to overcome these weaknesses and help on-premise ERP customers maximize the value of their data a modern, cloud-based reporting platform, Solver has now launched what they refer to as “Hybrid Cloud Reporting.” You can see it live in this video. This is a unique integration technology that enables you to:

  • Use your web-browser to run beautifully formatted reports (looks like Excel formatting).
  • Benefit from true real-time reports on your ERP data without any data transfer to a separate reporting database.
  • Drill-down from any number in the report directly into your underlying GP transactional data. 
  • Easy internet and browser-based access with no need for VPN, or software like Terminal Server.
  • Enter budgets from user-friendly forms (looks like Excel) in the cloud and have the transactions stored directly into the GL budget table in the ERP database.
  • Be better prepared to move to a cloud ERP later because the reporting and budgeting solution is already in the cloud. 

In other words, now your accountants and reporting end-users get the best of two worlds by only needing a web browser to run live ERP reports and drill-down.

Below is a simple architecture diagram to explain how it works:

hybriddiagram

What about budgeting and forecasting?

Like many other cloud-based CPM solutions, Solver also offers budgeting and forecasting. With the new Hybrid Cloud technology and Solver’s cloud-based Planning Module, users can store budget data directly back from Solver’s budget forms in the cloud, into the General Ledger budget table in the ERP database. 

So, if you struggle with manual Excel-based spreadsheets for your budgets, you can save a lot of time by eliminating emailing files between users, linking between spreadsheets, and put better controls in place for the entire budget process with workflow and approvals. 

As an example, users can access budget forms like the example below with their browser and instantly, until you close the budget process, update their department’s budget in the ERP system. Since Solver’s Hybrid Cloud updates are real-time, reports can immediately be run to see the impact of these changes on the budget.

Enjoy Faster and Better Decisions in the 2020s

Companies like Solver, Prophix, Vena, Adaptive Insights, and Planful are driving the next generation cloud-based reporting and planning technology. However, with the lack of live reporting and live budget write-back to on-premise ERP systems, accountants and very active ERP users have been left with their legacy tools for their real-time reporting needs.  

With the release of Solver Hybrid Cloud, these users now get the best of both worlds and can start ushering in the 2020’s by enabling themselves and other users with faster and better decisions.  Learn more about the benefits of choosing Solver CPM solutions by contacting us today or requesting a demo. 

Supported ERP systems are: Microsoft Dynamics GP, SL, and NAV, Sage 100 (SQL)*, 300* and 500*, SAP Business One (SQL)*, and Acumatica*.

*) Direct budget writeback not offered for these ERPs.

 

This entry will recap the Biz.ONE User Group Conference, held in Garden Grove October 23-25, 2017 – and what’s on the horizon for SAP Business One.
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