A well-organized and well-run accounting system gives you a real-time view of your company’s performance. But what makes it an even more revealing tool is an integrated budgeting system that looks to the future and helps you guide the organization.
Here are three elements of an effective budgeting system.
- Make your budget a key element of your accounting system.
It may sound like common sense, but your budget needs to be incorporated into your accounting system so that you will be measuring and planning for the same things. And specific reports in the financial application can illustrate how your team measures up to what they have planned. So the data should be integrated.
- Get buy-in from all key personnel.
Every person that has any fiscal responsibility in your company needs to prepare the budget for his or her part of the team. It doesn’t work well when a central person, perhaps a controller or a head planner, prepares the budget. You simply cannot afford the excuse that the responsible manager didn’t create the budget, so they can’t make it happen. Everyone must prepare their budget, defend it during the planning process, and live by the results.
- Report, Report, Report.
People respond to what you can measure. As a result, they will respond to what you report. Make every possible report show what the budget is and how actual results compare. Are you successful? Did you measure up to your commitments? Are you on track? Make every responsible manager accountable.
If you need some help with your budgeting process, we at Net Plus Consulting Inc. can help you. We’re a nationwide service provider that specializes in financial applications and small business technology. To get started, check out our website or contact us to arrange a free one-hour consultation.
