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Strategies for Boosting Budgeting Efficiency: Monthly Metric Focus

Streamlining budgeting processes: Techniques that enable businesses to finalize budgets more expeditiously and produce higher quality outcomes.

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Accelerating and improving budget creation processes for organizations using these strategies.
Accelerating and improving budget creation processes for organizations using these strategies.

Strategies for Boosting Budgeting Efficiency: Monthly Metric Focus

Rewritten Article:

Hey there! Let's chat about streamlining your budgeting process. Budget season doesn't have to be a headache – with the right approach, leading organizations are wrapping up their budgets in just 28 days or less! In this article, we'll share four practical strategies to ensure a smoother, more effective budgeting process.

Want to know the secret? The overall cycle time to complete the annual budget measures the number of calendar days from setting budget objectives to delivering a budget ready for use. Based on data from over 5,500 organizations, APQC finds that top performers (those at the 25th percentile) complete the annual budget in 28 days or less, nearly double the speed of organizations in the 75th percentile.

Tips for a Seamless Budgeting Experience

  1. Collaborate throughout the budgeting process: The budgeting process shouldn't turn into a battle between finance and operations or management and executives. Finance leaders should establish expectations from the get-go that this will be a collaborative process, driven by communication, negotiation, and problem-solving. Stakeholders are more likely to support solutions they've helped create, so providing opportunities for collaboration leads to more realistic targets and alignment across the organization.
  2. Train stakeholders on the budgeting process: Before the budgeting process even begins, hold a kickoff meeting that includes training for everyone with budgetary responsibilities. Ensure they know the timeline for deliverables, what a good budget deliverable looks like, and expectations at different stages in the process. If you're using a specific budgeting software, make sure users are trained on how to use it. Leading organizations also maintain process documentation, including step-by-step guides, templates, and troubleshooting resources, to help stakeholders carry out the process effectively.
  3. Start the budgeting process later: Although it may seem counterintuitive, starting the process later often results in a more realistic budget. Why? It allows organizations to observe more of the current year's actual results rather than creating a budget based solely on forecasts. In a dynamic environment, fourth-quarter forecasts prepared in the second and third quarters may already be outdated. Delaying the start of the budgeting process gives you more data to work with and results in a more accurate budget for the next fiscal year.
  4. Leverage technology and cloud-based tools: With multiple hands shaping the budget, it's crucial to standardize the data and processes supporting it. Cloud-based budgeting tools can help avoid versions of the truth and errors that come with them. Many of these tools update data in real-time, allowing everyone to see the immediate impact of changes to the budget. If cloud-based tools aren't available, ensure that you have strong governance with strict version control in place to avoid confusion about the final budget version.

By implementing these four practices, you can steer the budgeting process effectively, transforming it from a lengthy series of drafts and negotiations into a collaborative, efficient, and seamless experience. Happy budgeting!

Perry D. Wiggins, CPA, is secretary and treasurer for APQC, a nonprofit benchmarking and best practices research organization based in Houston, Texas.

  1. For a more efficient budgeting process, finance leaders should instill a collaborative approach from the start, encouraging communication, negotiation, and problem-solving among all stakeholders.
  2. It's advisable to hold a training session for all budgetary stakeholders prior to the budgeting process, outlining the timeline, deliverables, expectations, and usage of any budgeting software.
  3. Starting the budgeting process later can lead to a more accurate budget, as it allows for the consideration of actual results from the current year, rather than relying solely on forecasts.
  4. To avoid errors and maintain consistency, consider using cloud-based budgeting tools that standardize data and update in real-time, allowing stakeholders to see the immediate impact of budget changes.
  5. By adopting these practices, the budgeting process can be transformed, reducing lengthy drafts and negotiations, and promoting a more collaborative, efficient, and seamless experience.
  6. Top performers, as identified by APQC, complete their annual budget in 28 days or less, demonstrating the potential benefits of an optimized budgeting process.
  7. In your personal-finance budgeting, adding cloud-based tools can help streamline the process, providing real-time updates and allowing for efficient budget management.

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