May 9, 2023
An organization's ability to deliver sustainable, profitable growth depends on the strength of its plan, which begins with developing a fiscal budget. To create an optimal budget, employees must work together to compile, review, and update a company's revenue, expenses, and cash flows for the upcoming fiscal or calendar year.
However, doing so manually comes with its own share of challenges, which can range from long nights and weekends spent coordinating personnel to trouble gathering information from diverse sources or managing multiple approval processes. Many financial leaders dread the annual budgeting process, especially those who rely on multiple spreadsheets, manual reconciliation and data management, and outdated systems and resources.
Needless to say, this process can be overwhelming and stressful — and mistakes are common. Furthermore, paper-based systems and outdated collaboration tools that involve excessive back and forth – multiple phone calls, emails, or in-person meetings – often lead to higher costs, man hours, and frustration surrounding the budgeting process.
A typical budget is based on a set of assumptions that are generally not too far distant from the operating conditions under which it was formulated. If the business environment changes to any significant degree, the company's revenues or cost structure may change so radically that actual results rapidly depart from the expectations factored in the budget. The efficacy of budgeting is highly dependent on the delivery of accurate information to your financial planning and analysis teams.
It can be very time-consuming to create a budget, especially in a siloed environment of functioning where many iterations of the budget may be required. WSJ reported 49% of the CFOs spending most of their time developing budgets. Manually allocating funds, monitoring and approving employee expenses, and reconciling payments turn out to be extremely complicated and time-consuming for the finance teams.
Sancode technologies has helped organizations streamline their financial processes and workflows and have automated budgeting with the help of cloud, RPA & AI/ML technology.
A cloud-based platform can allow finance and operational budget stakeholders to easily collaborate on one platform to ensure they are working on a single, connected, enterprise-wide plan and budget.
RPA tools can track and document real-time fiscal activity throughout the year and generate finance reports like the P&L statement in seconds, thus verifying the numbers quickly, rather than reconciling every payment and writing each manually.
The use of machine learning and predictive analytics can uncover correlations, outliers, or exceptions that a person alone wouldn't be able to recognize. It can materially improve the accuracy of planning and greatly reduce time spent in planning processes and also reduce the time spent on analyzing data. Predictive planning, driver-based budgeting, robust "what-if" scenario modeling, sandboxing, top-down and bottom-up budgeting can be extensively carried out with the futuristic capabilities of Artificial Intelligence.