Budget cycle management may be the most important series of tasks completed by an organization as it relates to finance. Often, budget cycle management will involve a combination of individuals on the Financial Planning and Analysis (FP&A) team, as well as individuals in the Financial Systems or Information Technology (IT) functions. Employees on FP&A teams are often tasked with preparing and modifying budgets or forecasts, creating and maintaining relevant management reports and performing analysis on industry-specific metrics as it relates to the organization, among other activities. In order to maximize FP&A efficiency and ensure accurate budgets, forecasts and reports, organizations have been implementing more robust automation capabilities and doing away with the amount of repeated “manual” tasks an employee completes.

Budget Cycle Management

 

The Old Way of Doing Things

In years past, and in relatively rare instances today, common FP&A tasks may include manual data consolidation from many departments or sources into a spreadsheet, potentially from a variety of sources (i.e. Excel workbooks, emails with hard-coded numbers, etc.), development, maintenance and enhancements of reports designed for upper-level decision makers and data validation. Although these tasks are all important to the FP&A function, many of them are completed via manual processes, rather than utilizing the applications and tools in place. Further, depending on the level of complexity and the size of a given file, whether that be a linked or standalone Excel, PowerPoint or Word document, input or user errors can be frequent and files can become corrupted over time. In turn, more employee time is focused on data entry and validation, rather than analysis of industry-specific measures and metrics that drive organizational success.

Budget Cycle Management

 

The New Way of Doing Things

Utilizing powerful multidimensional analysis and calculation modeling tools leads to increased automation of budget and forecast refreshes. Developing member formulas and calculating on retrieve or save and creating standardized reporting templates, among other activities, can all reduce the amount of manual work an employee completes. Although manually completing forecast or budget refreshes does have its benefits (incorporate immediate changes into a data set), scheduling these tasks with .bat files and Task Scheduler is often a better choice. Mindfully utilizing industry drivers relevant to an organization’s core business can generate a baseline Budget that needs minimal further adjustment.

Monthly, daily or hourly schedules can be setup thereby keeping manual work to a minimum. Developing system generated statistical measures rather than creating Excel (or other) formulas based on a data retrieve avoids linking multiple cells together and avoids the possibility of reporting becoming corrupted over time. Further, these system-driven metrics can be included in a dimension and can be set to calculate on retrieve or when the file is saved. Finally, creating standardized reporting templates through budgeting and forecasting applications and linking directly to a live data set, rather than through Excel, Word or PowerPoint, can save countless hours. Rather than ensuring the formatting, indentation, font, etc. is correct, an employee is able to use their time for more value-added tasks.

Figure 3: Task Scheduler Setup with Multiple Triggers Set for Each Budget/Forecast Cycle

Figure 4: Example of Member Formula for Opening Inventory

Conclusion

Taking the initial time and resources to implement automation in a variety of spaces can lead to significant long-term benefits. Employee efficiency will undoubtedly be increased as worries about updating data, validating calculations and ensuring formatting is correct will be gone. Better data will allow for decision makers to take more informed actions beneficial to the organization as a whole. Last, incorporating these methods or something similar allows an FP&A team to complete more analysis activities and focus on organizational improvements.

Ben Ruth

Ben is a Consultant, Oracle FP&A at eCapital Advisors who joined the team in early 2019. He has 5 and a half years of accounting and financial analysis experience in the healthcare and technology industries. His background includes financial close process support, budgeting and forecasting, management reporting and process improvement. Ben holds a Bachelors degree in Finance from the Carlson School of Management at the University of Minnesota. In his free time, Ben enjoys watching and participating in sports, spending time up north at the family cabin and caring for his rescue dog, Harvey.

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