Keeping an eye on Budgets is easier than you think.
Running a business is not easy. There's never enough time and often the senior team are more focussed on top line revenues than managing the costs.
For many businesses, setting and managing Budgets is seen as a pain or delivering little value. Building an annual budget takes time and involves analysing previous performance, understanding variances, forecasting revenues and estimating costs. In short, for SMEs - its a finger in the wind. Managers will often cite the significant variance between budget and actuals to highlight how unpredictable business can be and therefore justify the view of budgets being a waste of time.
The next challenge that results in low levels of effective budget management within SMEs is that budgets are not easily disseminated across the business. Departmental or functional managers may get access to a shared spreadsheet displaying their annual budget, but with limited detail of how the budget was arrived at or the financial parameters that they need to work within. More often than not, middle management find budgets a constraint, without the visibility or the controls to monitor and ensure budgetary compliance across their teams.
However, Managing Budgets and Approvals is now easier than ever. With the explosion of cloud based software in the procurement and accounting space, the tools are now readily available to make the process of setting and managing Budgets a simple task.
Being easy to align budgets with actuals, sync data with your accounts software, share budgets with managers where-ever they are located, provide buyers with easy to use tools to raise requisitions and get approvals and the ability to monitor spend against actual spending in real time is transforming the perceived value of budgets to leaders of small businesses.
To help you learn about Budgets and how they can help your business, we’ve shared some of our favourite links.