Setting & managing client budgets
Why accountants must get involved in setting and managing client budgets
As an increasing number of organisations look to streamline or even remove the need to process supplier invoices, accounting professionals should look upstream to find opportunities to add value.
For most companies, the process of purchasing, accounting and paying for low value products and services is often highly manual, cumbersome, error prone and complex. And yet, these types of transactions can represent 80% of purchases by volume.
As a result of these upstream inefficiencies, accounts payables teams are often deluged with large numbers of supplier invoices, with little or no information to decide what can and what can’t be paid. This is a major bottleneck in many accounts departments - which forward thinking accounts professionals and finance directors can help to resolve.
By helping clients to set and manage budgets, accountants and finance directors get a deeper understanding of a clients business and deliver significantly more value to business owners. Proactively controlling costs has significantly more value to clients than reporting on historical performance. Additionally, having effective budgets in place gives business owners more confidence in forecasts and can help business leaders to make more robust investment decisions.
Budgeting is, for most businesses, an essential discipline to ensure the smooth running of a company, however, the difficulty in effective management often results in budgets being set annually, filed away in a shared spreadsheet and ignored, until the end of the budgetary period.
Controlling budgets at a departmental level or for project delivery often requires large and complex ERP and results in cumbersome and complex processes to set, manage and enforce budgetary controls. Hence their relatively low levels of adoption in small and mid sized companies.
For smaller businesses, effective management of budgets can be the difference between surviving and thriving.
The new breed of cloud based Purchase Approvals Platforms, such as Zahara, are fast to deploy, especially across multi-site organisations - where centralised control over localised spending is critical.
Being highly intuitive and easy to use means that employees and departmental managers rapidly adopt and use the budgeting capability - with information shared instantaneously. So a manager can set an annual, monthly or weekly budget for their department or project at a high level - then drill down to control granular spend at a product, cost centre or nominal code level.
To enforce budgetary discipline within the business, technology platforms need to have the facility to monitor actuals against budget and highlight risks of overspend or even shortfalls. Budget owners need to have a real time view of how their budget is being consumed, with alerts to unexpected behaviour.
Another important point to consider, is that effective budgeting is a pre-cursor to purchase requisitions, orders, approvals and the initiation point of planned spending. By getting involved in budgeting, finance teams can deliver a ‘joined up’ approach with more advanced warning of purchases with resultant impact on likely invoice volumes and cash outflows.
To many business leaders, the value of their finance teams sky rockets when they add value by controlling costs and eliminating inefficiencies before they effect the business - rather than retrospective reporting.
So, with a powerful and effective cloud based purchase approvals platforms such as Zahara, Accountants and Finance Professionals now have the opportunity to help their clients to set and manage budgets. As a result - they can deliver more value to their clients and reduce the burden on accounts payables to check spending only on receipt of supplier invoice.
Take a look at Zahara (Take a demo) see how you can help clients to manage their budgets.