BudgetPak… XLerate your budget process

BUDGETING IS AS MUCH A COMMUNICATION BUDGETING IS AS MUCH A COMMUNICATION EXERCISE AS IT IS A FINANCIAL ONEEXERCISE AS IT IS A FINANCIAL ONE

Pulse Survey

Budgeting is as much a communication exercise as it is a financial one:

•Strongly agree

•Somewhat agree

•Somewhat disagree

•Strongly disagree

The first budget?

Where are we now?

Widespread dissatisfaction

• Almost two thirds of 500 CFO Magazine respondents think their planning process is influenced more by politics than by strategy.

• “What best explains the lack of value in your planning process?”

1. Lack of a well defined strategy

2. Lack of a clear linkage of that strategy to the budget

3. Lack of individual accountability for results

Source: The Buttonwood Group, LLC and CFO Magazine

What can be done?

Pulse Survey

Our past efforts to improve budgeting:

•Have focused on improving the mechanics of the process

•Have focused on improving communications

• Key Definitions

• Problems to Address

• Our Recommendations

Presentation Outline

Why do we budget?

What is Communication?

Sending

Receiving

Understanding

Efficiency vs Effectiveness

What if nothing changes?

Managers not being fully informed of budget decisions and, therefore, not keeping to their budgets.

Department level lack of budget responsibility.

I didn't know we were making cuts...Where are my positions?

Lack of alignment

Budget plans not aligned with mission

Budget accuracy is not in control; 'fire drill' type of reactions to issues identified too late to be effectively addressed, etc

Dissatisfaction with overall process & lack of resources in budget.

Not everyone pulling in the same direction. Missed objectives...

No alignment between the teams

Just making sure everyone is on the same page and understands the numbers

Lack of ownership & Accountability

Poor budget decisions

Strategic planning is not linked to resource allocation

Pulse Survey

Who does the budget input?:

•Finance does the bulk of it.

•Line managers and department heads do the bulk of it.

• Key Definitions

• Problems to Address

• Our Recommendations

Presentation Outline

Communication as an Excuse?

Lost in Translation

Budget Template?

Language Barriers Impede Communication

Budget Templates Are Poor Communication Tools

Financial Control vs User Flexibility

Pulse Survey

What are the top issues that preclude good communication inside your budget system?

•We don’t let managers touch the system to begin with.

•They use the system but they don’t know what they’re doing.

•Inflexible - too many lock downs in the system.

•Nothing in the system to help users provide their rationale.

• Key Definitions

• Problems to Address

• Our Recommendations

Presentation Outline

Trivial recommendations =

Think about it

Trivial results

1) Active engagement from line managers.

2 Principles

2) We have to understand and meet their needs.

1. Involve your user community in solution development.

2. Let managers budget in a way that makes sense to them, but then translate “manager-speak” into “accounting-speak”.

3. Make it easy for managers to provide assumptions, explanations and detail (the business rationale) and have the system capture and report it.

4. Balance Finance’s need for control with flexibility for the users.

Recommendations

Involve your users

1. Involve your user community in solution development.

2. Let managers budget in a way that makes sense to them, but then translate “manager-speak” into “accounting-speak”.

3. Make it easy for managers to provide assumptions, explanations and detail (the business rationale) and have the system capture and report it.

4. Balance Finance’s need for control with flexibility for the users.

Recommendations

You need a Rosetta Stone

You need a Rosetta Stone

Strategic Initiatives

Marketing CampaignsEvents

ProgramsIT Projects,Training Programs,

One-Offs

1. Involve your user community in solution development.

2. Let managers budget in a way that makes sense to them, but then translate “manager-speak” into “accounting-speak”.

3. Make it easy for managers to provide assumptions, explanations and detail (the business rationale) and have the system capture and report it.

4. Balance Finance’s need for control with flexibility for the users.

Recommendations

Justification & Detail

LeasesLeases

1. Involve your user community in solution development.

2. Let managers budget in a way that makes sense to them, but then translate “manager-speak” into “accounting-speak”.

3. Make it easy for managers to provide assumptions, explanations and detail (the business rationale) and have the system capture and report it.

4. Balance Finance’s need for control with flexibility for the users.

Recommendations

Flexibility AND Control

ConfidenceConfidence

CredibilityCredibility

• There is no “silver bullet” but there are best practices.

• Recorded presentation will be made available.

• We have a free, Budget Intelligence Assessment (BIA) to help you define you requirements and areas of improvement.

Wrap Up/ Q&A

www.XLerant.com203/328-3787

Warehouse slides beyond this point

The end of the spreadsheet mindset

XLerant, Inc.

Financial Control vs User Flexibility

Justification & Detail

Software Software Maintenance Maintenance AgreementsAgreements

Ted Notes

Pulse Survey

Do you believe your current budget system is <primarily> for you or for your business users (really).

•It’s for primarily for me

•It’s primarily for my business users

ExampleProduction Costs Talent Television Advertising Professional Fees

2010

Training

Efficiency vs Effectiveness

Lost in Translation

Lack of Training

Budgeting 101

What can be done?

Key messages of webinar

• Budgeting is as much a communication exercise as it is a financial one

• Excel is not the right tool.

• The ownership and accountability has got to be with tth users

• There is a path to success

Request copy of this presentation

Attend next week’s demonstration

Schedule a 10 minute call

Schedule a private demo

Next Steps

www.XLerant.com

700 Canal Street

Stamford, CT 06902

203/328-3787

What should we change?

What is Communication?

Sending

Receiving

Understanding

BudgetPak… XLerate your budget process

BUDGETING IS AS MUCH A COMMUNICATION BUDGETING IS AS MUCH A COMMUNICATION EXERCISE AS IT IS A FINANCIAL ONEEXERCISE AS IT IS A FINANCIAL ONE

For those who know there’s something wrong

What is Communication?

Sending

Receiving

Understanding

You need a Rosetta Stone

MASTER TEMPLATE

INITIATIVE

• What’s the purpose of a budget? Why do we do it?

• What do we mean by “communication”

• Efficiency vs Effectiveness

• Business implications of poor budget communication

• What are the problems we need to overcome?

• What changes are needed?

• Wrap Up/ Q&A

Presentation Outline

• What’s the purpose of a budget? Why do we do it?

• What do we mean by “communication”

• Efficiency vs Effectiveness

• Business implications of poor budget communication

• Why are the problems we need to overcome?

• What changes are needed?

• Wrap Up/ Q&A

Presentation Outline

1. Let managers budget in a way that makes sense to them, but then translate “manager speak” into “accounting speak” (think Rosetta Stone).

2. Make it easy for managers to provide assumptions, explanations and detail (the business rationale) and have the system capture and report it.

3. Balance financial control with end user flexibility.

4. Break the spreadsheet mindset.

Best practices for improving communications in the budget process

Flexibility AND Control

USERS WANT FINANCE WANTS

“Budget for initiatives, projects, events, etc.”

All special spending should automatically feed into a department’s overall budget without having to write Excel formulas like = Link

Everything’s got to properly tie out

Must be able to see the initiative spending discretely, but then see the entire department budget.

Flexibility AND Control

USERS WANT FINANCE WANTS

“Create a budget for an account by buildit it up (example: Software Maintenance by vendor).”

100% assurance that the detail adds up properly (e.g. the summation of the detail is accurate)

100% assurance that by adding line item detail, no other calculations were broken

Flexibility AND Control

USERS WANT FINANCE WANTS

“To be able to play around with multiple “sandbox” versions of their budget before deciding on which one to submit for formal review and approval.”

One version of the truth

“No debate” on which version was submitted as final

You need a Rosetta Stone

Strategic Initiatives

You need a Rosetta Stone

Marketing Campaigns

You need a Rosetta Stone

Events

You need a Rosetta Stone

Programs

You need a Rosetta Stone

IT Projects,Training Programs,

One-Offs

Involve your users

What can be done?