Recent TRG blog posts

You have a plan. You have a budget that supports it. Only one thing is missing: a way to easily view and analyse the cause-and-effect relationships between all the plan elements and the resources that support them. Not having this is a common complaint among senior executives who are responsible for managing and reporting on the execution of corporate strategy.

When it comes to budgeting, the traditional method used is spreadsheets. However, over the years, spreadsheets have demonstrated themselves to be insufficient to handle budgeting in the ever changing business world. Hence, dedicated corporate budgeting solutions were born to deliver the accuracy, agility and responsiveness that companies so desire. A powerful budgeting solution should help businesses adopt budgeting best practices, such as:

When it comes to budgeting, the traditional method used is spreadsheets. However, over the years, spreadsheets have demonstrated themselves to be insufficient to handle budgeting in the ever changing business world. Hence, dedicated corporate budgeting solutions were born to deliver the accuracy, agility and responsiveness that companies so desire. A powerful budgeting solution should help businesses adopt budgeting best practices, such as:

In 2010, Aberdeen Group carried out a study, which shows the graded popularity of standalone consolidation/reporting tools and consolidation/reporting tools included in ERP systems among best-in-class, industry average and laggard companies. The results indicate that standalone or specialised financial reporting and consolidation tools (71%) were preferred over consolidation features included in ERP applications (37%) by best-in-class companies.

Given the strategic planning best practices, it is obvious that the creation of a good plan requires far more than just collecting a set of financial estimates. To achieve a budget and strategy alignment, use the following six steps:

Given the strategic planning best practices, it is obvious that the creation of a good plan requires far more than just collecting a set of financial estimates. To achieve a budget and strategy alignment, use the following six steps:

Depending on their situation and strategies, companies approach the financial consolidation process in different ways. It is important that businesses thoroughly understand their choices so as to achieve an efficient financial close. The main approaches, some of which may be combined, are discussed below.

Most organisations have plans. There is, however, a huge difference between a good plan and a bad plan. A bad plan, for example, is one that consists only of costs and revenues. This plan provides no guidance for the organisation regarding how it is to achieve the revenue targets. There is no linkage between the high level goals and the day-to-day activities necessary to achieve them.

According to Ventana Research, the majority of companies (83%) view the ability to close their books quickly as important or very important. However, businesses nowadays take longer to close than they did five years ago. Pressures from both within and outside of organisations are preventing them from achieving an efficient financial close.

According to a study by Hackett Benchmark, companies spend on average 25,000 man days on planning and performance measurement per US$ 1 billion turnover. Another study by KPMG suggests that the budgeting process takes up 20-30% of managers’ and controllers’ time. Moreover, consultants at Horvath & Partner in Germany note that controllers spend at least 50% of their capacities on planning and budgeting.