Budgeting

Budgeting in most organisations represents an annual process. Budgets formulate in numbers the organisation's planned revenues and expenses for the next year. In summary, the purpose of budgeting is to:

• Provide a forecast of revenues and expenditures i.e. construct a model of how your business might perform financially speaking if certain strategies, events and plans are carried out.
• Enable the actual financial operation of the business to be measured against the forecast.

Accountants love to budget in Excel due to its rich functionality and ease of use.

The Problem with Budgeting in Excel

The annual budget process can be a real chore. Why spend more than 90% of the weeks and months needed to create a budget copying, typing and crunching numbers, and less than 10% of the time analysing and understanding your company or departmental budget? Turn those percentages around to make the budget process what it should be - the blueprint for your organization's success. Many budget controllers will admit that despite Excel's advantages it also has serious deficiencies:

Failure to handle multidimensional organisations - Most organisations are required to prepare budgets taking into consideration the multiple facets or dimensions of its business (e.g. combinations of entities, departments, offices, staff members, clients, products, currencies, periods, etc.). Because of this multidimensionality of the data, Excel users struggle to design robust models as Excel is inherently a 3-dimensional cube with rows, columns and sheets.

Formulas everywhere -  Even the simplest models require numerous Excel formulas to:

• perform aggregations (summing up periods, accounts)
• perform complex calculations based on assumptions provided
• link different spreadsheets together.

Difficult for multiple users to collaborate -  Allowing different users to collaborate on a shared budget is difficult - often requiring versions of the same model being sent to different users, returned to a budget controller after completion, and   requiring consolidation to determine the overall effect of budget changes.

Slow turnaround - For the reasons set out above, it is therfore no surprise that there are often significant delays in a budget change being made by a user and the outcome becoming visible.

The Problem with Budgeting in a Web-Browser

Many software providers have opted for a 'web-browser only' interface to their solutions. In our opinion, although such systems set out to control unauthorised changes to budget templates and formulas, users end up preparing budgets outside such systems in Excel and then pasting the results into the corporate model. 

How are our Budget Solutions Different? 

BIOLAP provides customised budget solutions that use an OLAP multidimensional database and engine to store budget data, assumptions and formulas centrally. This allows users to interface with the budget model using Excel and Web-browser templates. The benefits of this approach include:

• data stored securely in a central multi-dimensional database that can be accessed by all budget holders and contributors at the same time
• fewer formulas to maintain in one location
• individual user security maintained centrally that allows the budget controller to restrict a user to accessing say only one department
• instant results immediately visible to all budget users - a user can change a revenue number and instantly see the outcome on the bottom line and dependent allocation calculations
• audit trail of all budget changes allowing roll-backs to previous positions
• secure back-up facility - allowing the restore from a previous back-up and roll-forward of changes made to date
• write-back from Excel or Web-Browser templates to the OLAP database
• sophisticated phasing functionality - based on past actuals, period intervals, etc
• allowing bottom-up or top-down spreading
• actuals and budgets can be stored in a single database allowing immediate variance reporting
• more flexible analysing and reviewing of budgets
• models moulded to fit exactly your organisation's  budget methodology and format -  our solutions can be used to power your existing and most complicated budget and allocation templates without retraining your staff in a new software system
• actuals and budgets stored in one place making forecasting and reporting easier. 

Create an enterprise-wide budget that can be viewed, reported on, and analysed as quickly as numbers can be entered - virtually in a fraction of the time you've spent before. Your budget will be based on up-to-the-instant Actuals, since data is synchronised automatically, directly from your transactional databases. Best of all, you'll make your entries in a fully functional Excel spreadsheet which in turn automatically updates the budget database for all to see - instantly. Our budget functionality represents true on-line processing of corporate information at its best.

Types of Budgets

BIOLAP has delivered budget solutions that include but are not limited to:

• Revenue budgets - budgeting at a client level
• Staff expense budgets - budgeting at an employee level for all employee related expenses
• Capital expenditure budgets - budgeting at an asset level for costs and depreciation
• Profit & Loss budgets - combining the results of revenues and expenses
• Cash flow budgets - translating and phasing budgets to reflect anticipated cash flows 

 

Please contact us for more information about our budget solutions or call us on +44 (01952) 456-453 or +44 (07785) 766-829

Forecasting

Once a budget has been established (see Budgeting), the next objective is to achieve or exceed budgeted results. Forecasts are valuable tools that allow you to update projections during the year for known/actual results to date and anticipated changes to the assumptions for the remainder of the period.  This allows management to determine whether the organisation or parts of the organisation are still on track to achieve the committed budget. and to take the necessary corrective actions to improve the outcome during the remainder of the period.

Although some organisations only perform formal reforecasting exercises on a quarterly basis, many organisations are moving to more dynamic monthly or even rolling 12 month reforecasts. Understandably, it is therefore important that the forecast can be completed as quickly and accurately as possible. In many organisations the process is so time consuming that it seriously deminishes  the value achieved.

How are our Forecast Solutions Different? 

BIOLAP provides customised forecast solutions that use an OLAP multidimensional database and engine to store budget, actual and forecast data, assumptions and formulas centrally.  Users can interface with the model using Excel and Web-browser templates. The benefits of this approach include:

• Timelines
  • If it takes days or weeks to create forecasts, the opportunity to analyse the near-term business scenario will be lost.
• Immediate data for Actuals
  • Dynamically retrieved from transactional systems - which in turn serve as the basis for Forecast figures. This means an end to waiting for end-of-the-month, batched reports, as well as an end to redundant re-keying to prepare Actuals, Budget and Forecast data in composite reports.
• Universal formula application
  • You decide the percentages, weighting and other metrics that affect your revised forecast figures - our solutions apply them across all areas, regions, products, etc. for fully automated calculations.
• Use Excel
  • Users work within a familiar Excel environment. No lengthy classes to attend or programs to decipher. Just use Excel spreadsheets but with automatically-provided data and the power of combining hundreds of spreadsheets into one.
• Share instantly throughout the enterprise
  • Whether on the LAN or accessing forecast cubes remotely, our Forecast solutions provide instant access and the certainty of working from the exact same version of the information.

 

Please contact us for more information about our forecasting solutions or call us on +44 (01952) 456-453 or +44 (07785) 766-829