Drivers for Better Budgeting - XLerant

Less Variance, More Accurate Numbers: Top Drivers in the Search for Better Budgeting

What drives the decision to leave Excel? How do you measure success?  What is your budgeting ROI?
There’s rarely one definitive driver behind the search for better budgeting. 

Rather it’s a mix of issues – some are quantitative where success is easily measured: like improvements in the accuracy of the final budget or the reductions in variances that are the result of having numbers you can trust.  Other “softer” objectives (like better communication or improved accountability) are less easily measured – yet equally valuable for the organization’s fiscal health and bottom line.

Here are the top 5 most common answers from finance leaders on what drives their search for better budgeting, and why…
1. Responding to Revenue Variability
“The new Vice President of Instruction was able to work across numerous departments and quickly come back with a list of about 25 to 30 changes, totaling around $450,000 to $500,000 worth of adjustments.”      – Read the case study

Industries that are highly dependent on enrollment or participation numbers, product sales, or impacted by shifts in the economy – require better “What if” planning and analysis – and the ability to quickly and easily make changes in the budget or forecast based on real-world data.

2. (Very) Tight Margins
“In 2018 actual results were only off budgeted amounts by 1.4%.” Karen D’Anjolell, Budget Administrator, NJM Insurance Group

For customers in highly regulated or nonprofit sectors where every single dollar counts, accuracy matters.  Budgeting is not an annual exercise – it’s an ongoing mission critical activity to maintain solvency.  An added challenge for these organizations – capturing insight from staff at the program or department level is critical to budgeting success, yet many of these employees have little (if any) financial expertise.

3. Strategic Alignment & Ownership
“Our budget managers now understand what is included in their budget. We are finally at the point where we can identify every dollar and what it is for.”  – Watch the video

It’s easy to get sucked into the tactical “nitty gritty” of budgeting, capturing travel expenses, administrative and supply costs…  A growing number of organizations are asking managers to justify how expenditures will align with the strategic plan or support key objectives.  This documentation can guide cost-cutting decisions and provide insight into the profitability of specific programs or product lines.

4. Transparency & Engagement
“There can be communication challenges and resentment even in just the talk of budgeting – we have to help everyone understand that the market is changing and margins are tighter than ever before.”  – Jeremy Minar, Director FP&A, Alliant International University

Surprisingly, budgeting is a nexus for long-held grudges, misunderstandings, and territorial disputes among employees.  More and more often, finance and leadership teams are using budgeting as a vehicle to increase communication and transparency – an opportunity to dispel myths and engage employees in two-way dialogue on the organization’s financial health (and realities).

5. Efficient Use of Employee Expertise
“The manual three-day Excel forecast process, can now be done in a matter of three hours, it’s a huge change from the old process.”      – Read the case study

It doesn’t take a degree in accounting or finance to fix broken formulas or re-enter data.  For every growing organization, there eventually comes a tipping point where the low-cost of Excel is far surpassed by the wasted employee hours (and expertise).  This is an opportunity loss from both the finance team in creating, fixing and consolidating spreadsheets – as well as the budget managers whose struggles broke the spreadsheets to begin with.  (Because we believe your time is better spent on planning, analyzing and ensuring the best use of your organization’s resources.)


Read More