How to Keep Your Organisation on Budget

How can I empower my budget holders to create comprehensive budget plans?

CFOs can empower their budget holders to create robust, well-informed budget plans by giving them access to live information. With real-time data, budget holders have the power to analyse expenditure behaviour before deciding where to allocate next year’s funds. 

The primary steps to budget empowerment are:

• Ownership and accountability: Have you given budget holders the space to analyse, create, and own their proposal?
• Real-time data: Do budget holders have access to live insights in a central source of truth to inform their proposal?
• Overall company guidance: Have budget holders received clear guidance on the company’s long-term strategy, so they can ensure their department’s strategy aligns with wider goals?

When budget holders are empowered with key pieces of knowledge, they can build comprehensive templates for their departments, containing cost drivers, drill-downs into actuals, and clear KPIs to work towards in the coming year.

How can I build rolling forecasts and cash flow projections efficiently?

Rolling forecasts are vital to financial planning. Finance can create a forecasting foundation by leveraging the automation in their true-cloud accounting system, as this ensures all necessary information is held in one place, ready for insight and reporting.

For finance leaders who utilise integrations, consider how you can use the single source of truth (your accounting system) to forecast best, worst, and expected scenarios. This way, you can create a flexible rolling forecast that easily adjusts to fluctuating sales and inflation rates.

Organisations that need to perform in-depth scenario modelling can integrate your accounting system with best-of-breed scenario modelling software, such as Budgyt or Venna. Through these robust integrations, finance can leverage insightful software that pulls data from a single source of truth.

To efficiently build cash flow projections, start by identifying the projection period, the cash balance, and the cash due to be received during the projection period. This information is easily accessible when using integrated systems, as finance can self-serve the live data without manually consolidating it across multiple systems.

Once you’ve created a list of your inflows (the cash you’ll receive during the projection period), add an adjacent list of your outflows (the cash that will leave your business during the projection period). This will help you to project your net cash flow and closing cash flow.

At this point, your table may look something like this:

Although this is a simplified version of cash flow projections, you can use this as a jumping-off point to inform your projection. Remember to update your projections regularly, replacing the forecasted numbers with actuals as you move forward.

What tools are available to help simplify year-end reporting?

There are many tools available to finance that help to streamline and simplify year-end reporting, including robust integrations with industry-leading software and multi-dimensional reporting. Let’s walk through a couple of ways these tools help relieve finance from the stress of year-end.

Robust integrations free up time for finance to analyse numbers

Modern integration tools, such as GraphQL, provide seamless bridges for data to pass between disparate systems, while automation consolidates that data into a single source of truth. This greatly simplifies year-end reporting because all data is accurate, live, and in one place, ready for reporting.

Multi-dimensional reporting tools increase drill-down insight

Multi-dimensional reporting capabilities are also excellent tools that simplify year-end reporting. Budget holders and finance teams can slice and dice data in complex ways, which is imperative for measuring operational performance against budget. 

For example, multi-dimensional reporting helps finance to understand the cost of sales in the context of specific revenue streams or projects. In this instance, finance can set budgeted KPIs to track operational performance.

It’s only when numbers can be interrogated at a transaction level that they can be truly understood, another reason why multi-dimensional reporting tools are vital to high-quality analysis and informed budgeting.

Tackle budgets head-on

For some organisations, budgets and forecasting can be daunting. As CFOs globally submit their budget proposals for the coming year, leveraging real-time reporting, robust integrations, and forecasting tools can make the whole process seamless and transparent.

Book your free demo to see how Xledger can help you budget, forecast, and report efficiently across your organisation.