Budget
Running a business often requires owners/shareholders/CEO to carefully plan and review their finances. Most companies use some form of accounting for identifying, measuring, analyzing and reporting their financial information. Business budgets is maybe one of the most important accounting tools of company may use in their business.
Facts
Budgets usually represent a detailed analysis of how a company expects to spend money in future time periods. Many companies create budgets on an annual basis so they can carefully outline the expected needs of each department in the business. Using an annual budget process also limits the amount of time companies spend creating and managing capital resources.
Budget goals:
- Limit Expenditures: ability to limit how much money is spent on certain operations (avoid capital to be wasted).
- Creates Financial Roadmap: allow to review how well business operations followed guidelines and why budget variances occurred.
- Plan for Future Growth: Capital saved on regular business expenditure could be used on new business opportunities.
Main issue addressed:
- Defined and created a unique budget template that suits each department and country,
- Budget numbers completed by all stakeholders within 2 weeks without major disruption,
- Consolidation of all budget templates in a simple step,
- Spend less time on preparation than review,
Below on example of budget process:-
Budget Business
Budget process
PS: To have this process to work (and automated, systems must be fully reconciled and the general ledger must be clean.
Data Feed:
Represent all the informations needed to prepare the budget
Budget template:
Reflect budget needs /requirement and must be as simple as possible to update and to be used by all stakeholders.
Budget send to department:
Clear budget instruction and timeline needs to be communicated to each business operations.
The budget preparation and email send to each business operation should be automated in order to avoid human error and shorten preparation time.
Budget Consolidation:
After review of each budget submitted by each operation, the budget needs to be consolidated by country, by cost centre and line of business.