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Data quality key to budgeting and forecasting

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30th Oct 2013
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Two thirds of FDs surveyed said data quality and consistency was the biggest business challenge they face when it comes to budgeting, forecasting and reporting.

The Talentia Software research comes at a time when the role of finance departments is evolving to that of a wider business partner with an active involvement in the fulfilment of larger corporate objectives.

The new survey also revealed some major changes in budgeting habits, with a shift towards either monthly budgets or a zero-based approach to forecasting. However annual budgeting remains a core component of corporate performance management (CPM) for many.

Julie Windsor, managing director at Talentia Software, said: “While spreadsheets still rule within finance departments, CPM systems support the wider business remit by enabling finance teams to be more closely involved with the business at large through technology.

“The ability to provide clear, easy-to-understand information in the right format allows those operating outside of the finance function to feed into the process.”

In terms of rolling forecasts, more than half of respondents have implemented them as the primary way of making budgeting, forecasting and reporting processes more efficient during the last five years.

In addition, more than half were concerned about the amount of time it takes to forecast and report critical data; however, organisations are starting to adopt integrated CPM systems, and efficiency was cited as the primary driver behind investment for around half of respondents.

Around 60% also echoed the importance of collaboration with regards to speeding up the financial reporting process, yet interestingly 11% actually felt that bringing other departments into the process would lead to a slower reporting cycle.

The survey also found that company departments need to work together more closely on the reporting, planning and analysis of critical data in order to achieve organisational objectives.

Other highlights from the FD survey included:

  • 54% believe collaboration across company departments is vital to improving corporate performance
  • 81% cite the importance of accurate data
  • 50% still rely on spreadsheets to manage corporate performance

AccountingWEB recently discovered a range of forecasting, planning and budgeting advice from FDs at an Access Group conference earlier in the month.

Some of the top tips included:

  • Use Excel for forecasting, budgeting and planning. Once you really understand this and are comfortable with it, then convert the data into tailored software
  • Business Intelligence: Key metrics include daily measurement of cash, in terms of sales, look at leads, meetings conversions to sales and revenues; also, look at the services side and the bulling rate 
  • Look at all of these metrics – use a BI tool to pulls data from different sources into a visual; plus consult dashboards daily

The video can be viewed on AccountingWEB’s new Vlog channel.

The results of the new survey can be viewed in full in a new whitepaper, available to download for free from Talentia Software.

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By David Gordon FCCA
08th Nov 2013 10:03

Dear Lord protect me from Bullshit

 

 Or as general Custer might have said:

 "I need the correct information at the right time in the right place"

   Or as Hillel said (2,000 years ago- when the Roman officer asked him to explain the bible, whilst standing on one leg)

 "Do not do to others that which you would not want others to do to you. All the rest is commentary on how to get there".

 

 

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