Top 8 reasons to use budgeting and forecasting software
Best practices in budgeting and planning often place a great deal of focus on processes and procedures rather than on the tools an organization uses to complete them. You probably already know why you should be budgeting and forecasting and have already implemented strong processes for doing so across your own company. But what many businesses and organizations fail to realize is that with the right software behind them they could be performing these processes much more simply, efficiently, accurately, and in a way that contributes more impactfully to strategic decision-making.
With that in mind, we’d like to present 8 compelling reasons why your organization should adopt dedicated budgeting and planning software as a core part of your ongoing digital transformation journey.
1. Budgeting and planning solutions make best practices easier to adopt
Planning is a smoother and more effective process when the people doing it follow established best practices. Dedicated planning software is designed with this basic truth in mind, removing much of the redundancy and repetition inherent in ad-hoc processes revolving around Excel spreadsheets and the constant back-and-forth of emails.
Software solutions that support best practices enhance the speed, accuracy, and adherence to the policy of the entire planning process, making it easier for everyone participating to understand what needs to be done and maintain confidence in the accuracy of the information they’re dealing with.
2. Addressing the full planning cycle
Forward-thinking organizations have begun planning with solutions that address the entirety of the planning cycle from data collection through modeling and analysis to reporting. Bringing all of these activities into a single platform achieves three things:
- It reduces infrastructure requirements by making it possible to retire legacy software and streamline your operational ecosystem.
- It makes handling a diverse range of functions (that might otherwise be handled by anything from sales forecasting software to budgeting software or supply-chain-focused tools) simple and efficient.
- It makes it possible to consolidate data streams from across the business to create forecasts and budgets that are both more accurate and can be updated in real-time to reflect frontline conditions.
3. Time and cost saving and error reduction across the whole planning cycle
A constant back and forth of emailed spreadsheets, written and verbal corrections, and questions - sometimes between multiple different teams - is a recipe for confusion and error, as changes are almost impossible to track. (And if you want an idea of the cost that errors introduced by working this way can carry, the European Spreadsheet Risk Interest Group has been keeping tabs on the financial repercussions of spreadsheeting errors for many years.)
Dedicated planning software that incorporates built-in workflows and an embedded version history and control system helps to eliminate most of these errors - but it also speeds up your approval processes and provides clear indicators of progress.
Time savings from eliminating manual data consolidation can also potentially cut down the time taken to produce a monthly or annual budget and even a financial plan from several weeks to a few days or even hours - making monitoring that plan simpler as well.
4. Reduce your organization’s exposure to risk
Beyond the question of the error risk introduced by manual processes, budgeting and forecasting software can help to safeguard your organization from a variety of financial risks. Improving the speed and accuracy of your reporting - and improving your data visibility overall - allows your leadership teams to create more accurate models of the future, and thus create plans that can capitalize on trends.
More accurate data-based forecasting also makes it practical to create a multitude of plans for variant futures, which leads us to our next point.
5. Create effective scenario management strategies
Effective scenario planning is the bedrock of response to times of commercial and operational uncertainty. Dedicated planning and forecasting software now incorporates the capacity to quickly create duplicates and iterations - that allows your teams to effectively create multiple scenario plans and workshop various different versions of the future. This means you’ll be more certain about the path you choose, and more capable of switching to already-scoped backup plans whenever unforeseen changes make your current approach unworkable.
6. Leveraging alternative budgeting models
Another capability of modern planning tools is their capacity to let your organization leverage alternative budgeting models. Smart budgeting gives you the ability to go beyond simply allocating money to different departments and monitoring expenditures. Access to real-time data through integrated systems lets you make full use of models like rolling forecasting to make more effective decisions about upcoming periods and make better strategic use of your organization’s resources.
7. Free up your schedule to allow you to focus on other tasks
In a typical team, a CFO and his direct reports can expect to spend hours - or even days - reviewing data to create forecasts for the organization annually. Modern financial planning and forecasting software can reduce this to just a couple of hours each week by consolidating data streams and removing the need to manually verify and update figures. Instant reporting functionality means the time-consuming and often redundant task of creating presentations and bespoke reports for the board can be accomplished with just a few clicks, rather than hours of scouring different documents for the necessary information.
8. More flexible reporting
Creating accurate, reliable reports is often one of the most stressful tasks for a finance team - especially when month-end closing deadlines are factored into the equation. Instant reporting functionalities in modern planning software turn the process of reporting from a days-long slog into a matter of minutes. Meaning managers can quickly interrogate data that they know is meaningful from a variety of different priorities and perspectives whenever the need arises.
How can Unit4 help your organization improve its FP&A Processes?
Unit4 FP&A has been developed to allow people-centric organizations to effectively make use of up-to-date planning, budgeting, and forecasting techniques with powerful technology that drives effective and actionable insights and error-free reporting and execution. To discover how our FP&A solution can help your organization effectively deploy the techniques and processes that we’ve covered in this post, check out our solutions product page or book a demo here.
