Business Budgeting Software vs Burger Flipping
My first off-campus job as a young undergraduate was flipping burgers at a fast-food restaurant. I was somewhat surprised to learn that the standard operating plan included making a certain number of burgers in advance of the daily rush rather than making the burgers when they were ordered. As you might guess, the restaurant’s static operational forecasting model was accurate about 50% of the time. The rest of the time we were either faced with significant waste or standing crowds waiting for their orders.
I can’t imagine running a profitable business today with a financial budget that only hit the mark 50% of the time. But with static, inflexible annual budgets based on last year’s numbers – what more can you expect?
Modern business budgeting software, like Kepion Planning, allows you to be more accurate in your short and mid-term planning by creating rolling forecasts based on real-time data. The rolling forecast function automatically imports actual data from other systems, along with on-going updated data, and projects what your financial situation will be over the next 12 – 18 months. That’s practically like having all those fast-food connoisseurs calling their orders ahead.
Stay on Plan, not on Budget
Budgets are not strategic plans – they’re detailed what-if scenarios based on certain assumptions. It always amazed me as a business consultant how many managers and owners would use their static budgets as an excuse for a decision saying, “It’s not in the budget.” What? Your budget doesn’t allow you to consider how to address opportunities or navigate threats?
Budgets need to serve the strategic plan, not the other way around. And in today’s dynamic environment the most efficient way to do that is to utilize business budgeting software that allows stakeholders to enter new scenarios and assumptions and see how it effects the bottom line in future months, and then effectively communicates those results across the organization. In this way the budget serves as a precision what-if scenario for managers seeking the best opportunities to advance their long-term strategic plans.
Make Plans on the Single Version of the Truth
Nothing creates more headaches for those tasked with creating a budget or forecast than having multiple versions of the truth. Accurate planning requires accurate consolidated financials based on real-time transactional details. The only way to efficiently keep a set of real-time consolidated financials available for forecasting is to use business budgeting software that also handles the daily transactional inputs.
Budgeting the way business needs it. What could be better?