Budgeting, forecasting and planning are central to every business across all industries. These are the engines of growth and development and are essential to ensuring efficient operations and driving forward momentum. These also tend to be the business processes that are often out of date or overlooked. So, how can you improve the way you currently manage your budgeting, forecasting and planning?
1. Define your goals
Financial goals are the structure on which to hang progress and development. So, it’s essential to set out the objectives that you have so that you have a clear idea of what you want to achieve and how – and when – you want to achieve it.
2. Integrate profit and cash flow objectives.
These will support your overall financial goals so need to be part of the planning process. Both will be crucial in ensuring that those overall goals are met.
3. Be realistic when it comes to budgeting
A realistic budget is more use than one that is based on potential opportunities that haven’t come to fruition yet. So, make sure your budget is based on actual revenue so that you can measure the true impact of spending on the business.
4. Budget – and then re-budget
Many organisations make the mistake of setting a budget at the start of the year and then ignoring it until next year. A budget becomes a much more useful tool if you apply new data to it on a regular basis. It will always be up to date this way and can be essential in terms of maintaining perspective on your current finances.
5. Opt for flexibility
Change is constant in business so any budgeting forecasting and planning that you’re doing on a regular basis needs to be able to adapt – flexibility is key.
6. Stay on top of your industry developments
It may be necessary to factor these in to your planning and forecasting, for example, to make them more accurate and up to date.
7. Share the responsibility
Traditionally, the finance team handles the budgeting, planning and forecasting. However, there is a lot that people right across the business can add to these essential processes. Get more individuals involved to see better, and more accurate, results.
8. Track and measure
If you’re tracking your results then you’ll be able to see how these measure up against what you forecast and planned for. This will enable adjustments to the processes you’re using to make them more effective.
9. Keep channels of communication open
The financial operations of the business are everyone’s concern – make sure that communication is effective when it comes to the financial side of the business.
10. Use the right tools
The right software can completely transform your budgeting, forecasting and planning processes, making them more accurate and informing better decision making across the broader business. If you’d like to find out more about what this type of software could do for your organisation, get in touch.