Once your company has decided to invest in a budgeting system, it is important to ensure that the new system meets certain criteria. Here are a few of them.
A budgeting system should first and foremost make your company’s budgeting work simpler and more efficient. This means that there are a number of things to look out for – not all systems are the same.
If, for example, your company is migrating from Excel to a dedicated system, some things may be new to you. If, on the other hand, you are switching from an “on-prem” system (a solution where the software is located on a single computer or server within the company) there are a number of other considerations to bear in mind.
No matter what your starting point, in this article we look at some important areas where a good budgeting system should be able to help you.
Importing and exporting data
Like most other commercial computer systems, a budgeting system is only as good as the data it is fed. That is why you should make sure that the system makes it possible to directly exchange data with your company’s other systems with which it is important for you to continue working in the budgeting work. As a minimum, the system should be able to communicate via a REST API (a standard for data exchange between systems).
It must also be easy for you as a customer to extract data from the system, whether you are sending data to a business intelligence solution or simply migrating work and data to a new system.
Cloud-based and easily accessible
The days of installing new budgeting and planning systems on local servers are long gone. This is yet another area where cloud-based solutions have completely taken over – simply because they offer the customer much greater value and flexibility: the supplier is responsible for all operation, backup and security solutions, and the customer can use the system from anywhere.
This has the additional benefit of reducing the dependency of budgeting and forecasting work on key individuals – enabling relevant people in different parts of the organisation to be more “hands-on” in the budgeting work. However, it is worth remembering that not all cloud-based budgeting systems are the same – we will consider some differences in the next section, but in the meantime will mention that we have also written a separate article on some relevant issues here.
Rapid implementation and self-service
It should not be too difficult for you as a customer to get started with a modern budgeting system. After all, the solution is there in the cloud, and it should be easy to set up links to all central systems without unduly disrupting your organisation.
In modern systems, you either set up budgets and routines yourself, or in collaboration with a supplier. In either case, a good system must give the organisation every opportunity to set up and make changes to templates or routines.
Uniform codebase for the solution
Some system suppliers, often those selling older software, make their solution available in the cloud using a procedure that can become unwieldy over time: instead of having a single codebase for all customers’ cloud-based solutions, they have produced and run the customers’ solutions as separate installations in the cloud.
This is “old school” software development that can quickly become costly for customers – both because operations will become progressively more demanding as the software ages, but also because it does not provide customers with the full menu of benefits offered by cloud-based systems. We have written a separate article on why you should have a cloud-based budgeting system.
Access control and versioning
If your company involves more employees in budgeting work, you can quickly find yourself in situations where you have to limit access to certain information – for example, customers or partners’ confidential information, information relating to employees’ salaries or other sensitive data. In modern budgeting systems, it is therefore vital to be able to define restrictions for what the various users can access.
It is also important that the system can log and report which user/employee performs which actions. If your company uses Excel, you will particularly appreciate this functionality: this will make it easier to both quality-assure and verify entered data, but will also, for example, provide a clear picture of whether a specific item of data has been updated – and if so, when and by whom.
Easy to switch to forecasting
Budgeting is an important exercise, in which management sets a clear course for where they want the company to move in the coming year. However, there is little chance of budgets working if they are not followed up.
Consequently, a good budgeting system must make it easy to switch from budgeting mode to forecasting mode. This will mean that actual figures from business operations are imported during the year to prepare forecasts that can pinpoint how different areas of the company are faring against budget. We have written a separate article on the difference between budgeting and forecasting.
The road ahead
Remember that a good budgeting system can also help improve other areas of your business , so choosing the right system is often a question of more than simply identifying how the system will make life easier for various individuals. If you are wondering which aspects of a budgeting system will be of particular importance to your business, please contact us for a chat!