Planning and budgeting software: Solutions to common problems

Posted by Rick Yvanovich

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Jack Welch, former Chairman at GE once said: “The budgeting process…sucks the energy, time, fun, and big dream out of an organization”. Yes, everyone hates it! If there is an effective way to do it without trying too hard will you take its advantages to grow? What you need are just a good planning and budgeting process and the right technology!

Planning and budgeting: Solutions to common problems

Planning and budgeting is time-consuming. Some take around 6 months to complete it and normally ends up with irrelevant or unusable data by the time the plan is executed. In recent survey by PwC, over 70% of responding organisations take over 2 months to complete their planning and budgeting process.

Furthermore, forecasting accuracy is also a pain since almost all of these organisations struggle with forecasting process, with only 10% confident that the actual performance difference is about +/-2 from the forecasts.

Due to the complexity of this process, people tend to skip creating a throughout budgeting process. This step is extremely important as it is the only way that tells you what you have got at hand and what you have to do in order to set up groundwork for a successful and efficient strategy.

Read more: How has Dana-Farber shortened their budget cycle by 40 per cent?

Have your own planning and budgeting process

One of the best practices is having your own process and sticking to  the followings steps:

Timeline: Spread project budget across the scheduled activities and across time and time phased allocation of resources is critical to the process. Make sure you don’t miss any activities as it affects your cost estimation. This step gives an overview on your overall plan which allows  you to make suitable adjustment and help your plan to be on track.

Objectives: Keep in mind that objectives should be results-oriented rather than activity-oriented and your objectives should be measurable and achievable. Be careful with this step as it can drive your initial plan into another direction.

Resources: Understand your business situation, and get your hands on controlling your finance, make sure funds are sufficient for current commitments and future projects. All resources should be aligned with your company’s objectives.

Read more: The main purposes of traditional budgeting

KPIs: The Key Performance Indicators give an understanding of business performance in relation to its goals and objectives. They enable you to identify what you are doing best and what you are not. In addition, you can clarify the reasons behind with clear evidences. Different industries require different sorts of KPIs, so choose the KPIs that are most suitable for your business.

Risks & Challenges: Take into account potential risks and challenges. Risk management considers the possible outcome of future events and helps to identify actions that need to be taken in order to prevent extra costs.

Budgeting strategies require financial managers’ hours of working and effort to collect data from a variety of sources in order to come up with a sound and achievable budget. And it is where problems come from, right?

As a professional financial manager, what you wish to know from your data, and what parts of it you want to improve most?

Three elements that financial professionals want to change most:

  • Time it takes to collect data
  • Data gathering tools
  • Process by which data is collected

Read more: The role of budgeting in corporate performance management

As a common practice, many businesses use Excel for planning and budgeting. However, it is inefficient and error-prone because it is a complex procedure that requires huge amount of time to input, review, check, audit, correct, and submit budget data.

This type of spreadsheets only offer you a fragment view at each individual aspect of your business. For instance, when you need to assess profitability by cost-of –goods sold, customer demographic, region, and types of products and so on; your current spreadsheets cannot perform these types of requirement. Also, when one aspect is changed, you barely see its impacts on other items.

Read more: 7 Worst Financial Fiascos caused by Excel errors

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Technology can help

With the support of innovative technology solutions which are designed to make Planning and budgeting process less stressful, you will be able to:

  • Reduce time to collect and consolidate data.
  • Use embedded tools to analyze information.
  • Improve the speed of your budgeting and planning process.
  • Reduce budgeting and forecasting cycle times.
  • Understand the insights of your organization's performance.
  • Generate integrated reports.
  • Use data like a statistic expert.
  • Make better business decisions.

Read more: Planning and budgeting systems that work

Technology can help financial planning and budgeting support the execution of strategic initiatives by connecting the link between budget strategies to organisational plans and strategies which increase the accuracy of financial forecasts and consolidates financial planning processes for better performance.

A relevant performance management solution, which includes planning, budgeting and forecasting capabilities, can support CFOs to build a planning process that links with other line-managers and as a result helps increase accuracy and business insight.

This technological approach has brought fruitful results to organisations who applied it, according to an Aberdeen research report in 2012. These organisations have achieved 23% shorter time in their decision-making process, 54% more likely to update plans and forecasts on a monthly basis and had improved 3% in operating margin comparing to others.

Read more: Step-by-step guide to budget and strategy alignment

However, technology by itself cannot cover all the above, but it needs a harmony combination of both CFOs – who play as the strategist and controller, and performance management solutions – which play as supporter and information provider in the process.

The key to achieve these results are the implementation and maintenance of these solutions to support planning and budgeting process, specifically:

  • Developing a collaborated planning and budgeting process to provide the foundation to reduce the planning lead time and increase forecasting accuracy.
  • Building plans from both top down and bottom up to increase accuracy as well as attracting more stakeholders.
  • Connecting planning and budgeting process to all activities to attract more stakeholders and ultimately, add strategic values and reflect the nature of the business.


A best-in-class Planning and Budgeting solution make it easier to control access to information needed to boost planning and budgeting process anytime and anywhere. It enables stakeholders, executives, financial managers to access and make better decisions based on well informed information. It’s time to move on with latest technologies that enable you to understand every aspect of your business with quality information and empower you to become an expert in decision making.

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Topics: Planning and Budgeting, CFOs, Financial consolidation, planning and reporting, Financial Accounting Management Software

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Rick Yvanovich
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