Is your budget really helping your business?
Is your budget really helping your business? Your gut reaction might be, “Yes, of course. We have to budget. Everyone knows that.” We agree that budgeting is a necessity but budgeting just for budgeting’s sake likely is not helping anyone.
A strong budget will work for your business, functioning as an action plan that gets you toward your strategic goals. If your budget is not aligned with your strategic plan – and vice versa – it can be easy to get off track.
How many times has this happened to you – you plan to do a budget review halfway through the year, only to realize that so much has changed that your original budget is not even working anymore?
An effective budget is not just numbers on a sheet.
You want your budget to balance by year-end, yes, but more than that you want your budget to provide leadership to your business or department. If you are an executive or a department head, you may be thinking “well, I am the leader. Is it not my job to provide leadership?” Of course, it is.
Think of a budget as a tool you can use to do so. If you set out your strategic priorities in your budget, it becomes a roadmap for your staff to act out your vision. It can help make tough decisions easier, guide the company towards growth, and, of course, let the business remain fiscally solvent.
Are You Budgeting for the Right Things?
All too often, it is easy to fall into the trap of using a budget to maintain the status quo. The sales department spends X dollars on employee expenses, so we will put that in. The telephone system costs X amount, so that goes in. After we tally up the expenses, we will need X in revenue to make a profit.
Your budget should be realistic, yes, but as we have been talking about it also needs to be strategic – and that is why you need to budget for the right things.
Spend More Time Analyzing Instead of Administering
All of this analysis, plus any more that your business needs, takes time. And depending on your software, it can also take administrative resources. Analyzing trends can be difficult to do when you are looking at a whole spreadsheet worth of raw, unfiltered data. That is why the software you use for budgeting is key. There are many solutions today that automate part of the process for you and ease the administrative burden.
Budgeting with True Sky makes it easy for everyone to collaborate on a budget and workflow and features dashboards that allow you to view the most important, in-demand data at a glance. It is cash flow forecasting made easy.
If you are spending more time administering the budget rather than analyzing it, there is a better way… join us for a webinar on March 17th to learn more!