Budgeting Best Practices

I would also be interested in "what not to do" in addition to best practices.

Excel

excel

Excel

We do ours in excel and later upload to the software after approval

Doing in Excel again, after swearing I would move to a 3rd party after last year. Someone has to make this easier for companies w/o big budgets for this project.

Excel, the more detail the better, with the ability to roll up to high level numbers, or drill down to the details.

Excel this year but moving to Hyperion Planning next year. Used Hyperion at a previous company. Cannot wait to use it!

We used Cognos TM1 for a number of years. It was our first official Budgeting system (after Excel) and worked well for us for years. Allowing multiple legal entities and OLAP cube-based technology, it really took us to the next level. Within the last year we have migrated to SAP's BPC. It has been..................tough. While much of the same technology, the intent was to leverage integrations with SAP's ECC and HCM (Human Capital Management) tools. Like TM1, it's nice working in a dedicated system, but we have had our challenges with data feeds between the platforms. Overall however, being on either platform (TM1 or BPC) has been a clear reporting and consolidated budget improvement over Excel.

We use Alight Planning

Excel

2 years ago we started using Adaptive Insights (formerly Adaptive Planning). It is a SAAS product, so there is no hardware and the cost is very, very, reasonable. The software feels like excel, but it has a lot more flexibility. We can import actuals into the software very easily for reporting and comparison purposes. They have a demo and a trial on their website, which I would encourage Excel budgeters to check out.

We like Host Analytics and Oracle PBCS (basically Hyperion Planning in the cloud). Both are cloud based and both are cost effective/quicker to implement. I don't think anyone will ever get out of excel...but tools like these help minimize the risks of using excel.

From my experience in corporate accounting and finance I've learned the importance of proper budget preparation and more importantly, continually monitoring the actual results against the approved budget. To be able to do that you have to make a commitment to doing what is required and also have the right tools to do the job.

The best practice in the budget planning process, as well as the analysis of actuals vs. budget is to employ a purpose designed software application that is tightly integrated with your ERP or accounting software. Excel or any other spreadsheet was not designed to do these tasks and can be extremely deficient in budgeting the organization's balance sheet and the statement of cash flows, both important in forecasting the future financial health of the company.

Using the ERP or accounting software built-in budget feature is probably worse because you normally cannot model any revenue and expense items and of course you cannot really forecast the balance sheet accounts, other than placing static numbers in them.

When you choose a purpose designed planning, budgeting and analysis software you may want to closely pay attentions to the following 10 "must have" features (used from various articles I have written on this subject):

1. Must be delivered as a database application for better control and management.
2. Should have a system-generated integrated set of forecasted financial statements.
3. Must have a modular approach with a complete array of functions such as: revenue forecasting module with cost; operating expense module; personnel module; fixed assets module; loans and other debt module.
4. Must have driver-based forecasting, which is the ability to work with unlimited and varied types of drivers.
5. Must have the ability to allocate forecasted amounts to pre-defined accounts.
6. Its business intelligence and rules must be built-in and available to users to choose from and with no user programming required (formulas, links, etc.).
7. The application chosen must allow users to set up a chart of accounts representing the actual accounting system’s chart of accounts (or mirroring it).
8. There should be either a direct link or simple interface to the accounting or ERP software’s general ledger, where actual data can easily be populated in the budgeting software and immediately used in the analysis process, following the accounting period close.
9. Reports—both visual and alpha numeric—must be readily available and with minimal effort. All budgeted financial statements (with a minimum of Income Statement, Balance Sheet and Statement of Cash Flows) should mimic their actual financial statements produced by the actual accounting software.
10. The budgeting, forecasting and business intelligence software application needs to act as an extension of the accounting software or ERP system’s actual financial data.

The are software applications designed for small and mid sized companies, some better than others, that were designed to deliver on these 10 points. Surprisingly, cost of implementing a well designed solution is a lot lower than what many expect, and certainly much lower than what was available only a few short years ago.

We used Host Analytics this year. I liked that we could pull the data from the cube into our Excel reports instantly. This made reviewing much easier.

I have used mostly excel. I did implement Adaptive Planning (I think now Adaptive Insights) several years ago. Found the cost reasonable for smaller businesses, highly adaptable, loading of historical data easily accomplished, ability to have a collaborate process and scenerio planning a huge plus.

My company uses Host Analytics, it is cloud based SAAS tool which is fairly easy to implement and not as costly as Hyperion. They have connectors to Netsuite, Intacct, Salesforce, Workday and several other applications so you can automate data loads to Host. We didn't use any IT resources in the implementation process and the application is administered by the finance team.

Previously we were a 100% excel driven finance department. Having a tool ensures version control and save us hours of time which was previously spent checking and re-checking excel formulas!! Also we now have budget, actuals and forecast in one place. A luxury given what we were dealing with before. Finance is now enabled to be business partner providing valuable insight.

As for budget process, I say figure out what matters to your business. Figure out the business drivers (headcount, bookings..whatever is relevant to your company) and model your budget in way that is dynamic. If a change in bookings impacts your marketing expense budget then the tool should have a way to flow the changes automatically.

Excel...albeit a sophisticated Excel budget tool that I developed for my company. We use it on a rolling, weekly basis and it helps us:
* make sure we are spending on our top priorities first
* see which desired products & services are funded
* keeps us tuned to our short-term and long-term spending priorities + wish list
* to compare our overall spending categories (Marketing, G&A, etc.) to best practices for the age and industry of our company
* have total visibility into our monthly burn

I recently added a link to a modest projection tool in the same workbook so we are always in a position to easily estimate what the P&L is going to look like at the end of the month, for the month and for YTD.

Christie,

We are in the thick of budget planning now... dump G/L accts reports (by class) from QBs into excel and determine new budgets there... once approved, excel will be transferred to QBs.

Wish there were a more efficient (cost effective) way... we are a non-profit, so no resources to improve this process.

Hyperion, Excel, and paper.

Used Excel in the past and very recently implemented Adaptive Planning, a cloud-based budget, planning & forecasting tool. As Dawn mentioned, it's easy to implement and user friendly.

We moved from Excel to Adaptive Insights 3 years ago. So far we are happy campers in terms of version control, payroll access control, ease of budgeting, and instant consolidating.

We use both Adaptive Planning and Excel for different parts of budgeting.

This is the first year I am leading the budgeting process at my firm. What I've learned is that it pays to plan ahead. I use Excel templates to gather important drivers of the budget, such as sales and margins, sales team expenses, and the information needed to make assessments and allocations. This part is done in Excel, but it is all brought together in our budgeting software (Adaptive Planning). Without software like this, I don't think I could manage budgeting for our 230 cost centers without a team of ten.

We use Adaptive Planning and Excel for our budgeting system. Adaptive Planning is great and has created many reports that automatically update when needed. The excel use now is limited to the special ad-hoc reports that we need to build. It depends on how complicated the model is and how much special formatting is required.

We have used Excel in past years, but are also attempting to bring in most, if not all, into Adaptive Planning.

I think Excel will always have a role to play in finance/budgeting, but it shouldn't be your only tool. After working with Adaptive Insights for several years, I can't imagine doing my job without a BI tool or relying solely on Excel. The ability to lock down versions and create new plans or what-if scenarios, roll up/down through levels in the organization to dig into questions, and to harness the raw data streams from multiple business systems to include ERP are just a few reasons to consider using a BI tool like Adaptive Insights.

Why do a budget at all? ;)

At the lowest level we use Excel despite being a large multinational company however at some point or another it is fed into a system that can consolidate based on SAP.

we do it on excel than upload it to ERP- oracle for control purpose.

Excel

We switched over from Excel to Dynamic Budgets a few years ago and like DB very much. Managers now input their 2017 assumptions and budgets into the DB templates, which have Excel-like functionality, for their areas of responsibility. We can import from Excel into DB (which makes monthly budgeting for payroll and benefits very easy), or export from DB out to Excel.

My company switched from excel to XLerant's BudgetPak. We use it in a decentralized environment. It's pretty easy to administer and the users like it.

I have used Anaplan in the past for a mid-sized business and it was excellent. I believe, it's best suited for companies that can allocate a minimum of one FTE to building and managing the financial models. It also integrates very well with excel, but it is costly.
A similar, less robust and costly, planning tool that I have looking into is Adaptive Insights.

We use Adaptive Insights. It is a great tool, combining actuals with budget and offers a strong reporting tool.