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12 Ways to Budget Better

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12 Ways to Budget Better

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What would you say if we told you that its possible to cut out weeks or months from your budgeting process?

Let's face it: budgeting for many organizations is PAINFUL!

Jointly defining what you need to focus on for the next 12 to 24 months is difficult enough, but then you need to encapsulate all of that into a financial budget – this can take weeks and months to complete.

The good news is: there is a better way to budget.

What would you say if we told you that its possible to cut out weeks or months from your budgeting process?

Let's face it: budgeting for many organizations is PAINFUL!

Jointly defining what you need to focus on for the next 12 to 24 months is difficult enough, but then you need to encapsulate all of that into a financial budget – this can take weeks and months to complete.

The good news is: there is a better way to budget.

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12 Ways to Budget Better

  1. 1. June 17, 2016 | Webcast
  2. 2. Cathy Fregelette Financial Practice Director, BroadPoint John Herbstritt Chief Solutions Architect, BroadPoint Nils Rasmussen CEO, Solver © 2016 BroadPoint Technologies | Slide 2 Joseph Janela CFO, APhA
  3. 3. © 2016 BroadPoint Technologies | Slide 3 12 Ways to Budget Better in 2017 Cathy Fregelette and John Herbstritt APhA Case Study Joseph Janela Solving the Problems with BI360 Nils Rasmussen Closing Comments and Q&A
  4. 4. © 2016 BroadPoint Technologies | Slide 4 Budget Operate Strategize Align Your Strategies and Budget 1. Keep your eye on the goal 2. Get the right people involved 3. Meet in the middle 4. Align your technology to support your strategy Build Your Operational Budget 5. Choose the right tool for the job 6. Standardize & fortify the templates 7. Monitor workflow and approvals 8. Lock down your budget Live with and Love Your Budget 9. Implement an “early warning” system 10. Roll your forecast forward 11. Start planning early 12. Build one source of the truth
  5. 5. Budget Operate Strategize That’s why nearly 1 in 3 associations don’t do it – and those that say they do, 19% don’t even write it down! Your strategic plan must drive your budget, and your budget must be allocated among your strategic initiatives. Period.  Do you have an actionable strategic plan?  Do you link your financial budget to drive your strategic outcomes? © 2016 BroadPoint Technologies | Slide 5 Strategic planning is difficult
  6. 6. © 2016 BroadPoint Technologies | Slide 8 RED FLAGS  Do you have a roadmap for your business?  Are you monitoring indicators related to you eco- system?  If you ask 10 people what the goals are, how many different answers will you get? BEST PRACTICE  Introduce how organizational goals actually link to initiatives  Set SMART goals to track progress  Align your strategic plan to monitoring mechanisms #1 – Keep your eye on the organizational goal
  7. 7. #2 – Get the right people involved © 2016 BroadPoint Technologies | Slide 9 RED FLAGS  Finance or Operation teams are disconnected from executive strategic planning  Limited insight on the progress of your division/ department/ fund/ project managers  Manager wearing multiple hats BEST PRACTICE  Revisit your organization chart  Identify teams and roles to ensure buy-in to the plan
  8. 8. #3 – Meet in the middle © 2016 BroadPoint Technologies | Slide 10 RED FLAGS  Cannot meet strategic goals with budget process  Top-down strategy does not match bottom-up team member input on a consistent basis BEST PRACTICE  Realign operational plans to achieve strategic goals  Establish and enforce your budget alignment through a central database process
  9. 9. #4 – Align technology to the strategy © 2016 BroadPoint Technologies | Slide 11 RED FLAGS  Strategy PowerPoint Budget Spreadsheets  Difficult to get insights from financial system to understand progress against goals and strategic initiatives  Key operational information is missing in budget BEST PRACTICE  Financial System – Configure it to report on your strategic progress  Other Systems – Make necessary changes to other systems to provide critical data
  10. 10. Budget Operate Strategize © 2016 BroadPoint Technologies | Slide 12
  11. 11. #5 – Use the right tools for the job © 2016 BroadPoint Technologies | Slide 15 RED FLAGS  A spreadsheet only approach resulting in multiple data sources  Cutting, pasting & re-entering the same data  Unstable macros  No version control  Manual consolidation and roll-up BEST PRACTICE  Approach your budget with an integrated set of tools
  12. 12. #6 – Standardize & fortify budget templates © 2016 BroadPoint Technologies | Slide 16 RED FLAGS  Different spreadsheets per department or manager  Provided templates not being used  Template being altered or changed BEST PRACTICE  Build a standard template and share it with your team  Tie your template to the data source  Lock down the ability to modify templates
  13. 13. #7 – Monitor workflow & approvals © 2016 BroadPoint Technologies | Slide 17 RED FLAGS  No structure for approvals  Unable to track the progress of the budgeting process BEST PRACTICE  Create a collaborative portal for teams and budget managers  Formalize the flow of approvals  Provide real-time visibility of budget status
  14. 14. #8 – Lock down your budget © 2016 BroadPoint Technologies | Slide 18 RED FLAGS  Budget is not finalized  Budget is not uploaded into your financial system or your budget database  Unauthorized budget changes post board approval BEST PRACTICE  Implement system controls to restrict budget entry or changes
  15. 15. Budget Operate Strategize Manual & Retrospective Your budget has been approved, but now that means you need to live with it… and within it! © 2016 BroadPoint Technologies | Slide 19
  16. 16. #9 – Implement an “early warning” system © 2016 BroadPoint Technologies | Slide 22 RED FLAGS  Caught over-budget and too late to react BEST PRACTICE  Provide stakeholders with year-to-date actuals vs. budget in real time  Implement a solution to monitor the conditions on a timely basis  Configure automated alerts for over/ under target
  17. 17. #10 – Roll your forecast forward © 2016 BroadPoint Technologies | Slide 23 RED FLAGS  Relying on month-old financial data to make critical business decisions  Unable to project where you will land at the end of current period… or fiscal year BEST PRACTICE  Provide a view of the year with your actual, budget & forecast to-date  Reevaluate assumptions and adjust forecasts based on changes in market conditions
  18. 18. #11 – Start planning early © 2016 BroadPoint Technologies | Slide 24 RED FLAGS  A “Big Bang” budget approach near year-end  Limited to no forecasting BEST PRACTICE  Reforecast on a regular basis to be a step ahead for next year’s budgeting process  Automate estimates of future periods based on your 12 month trajectory
  19. 19. #12 – Build one source of the truth © 2016 BroadPoint Technologies | Slide 25 RED FLAGS  No one place to go for the latest numbers  Every department has its own method for monitoring and managing budget BEST PRACTICE  Deploy common portal to entire organization for collaboration on the “GBU”  Adoption and access for managers & stakeholders to vetted reports and budget entry templates
  20. 20. © 2016 BroadPoint Technologies | Slide 26 12 Ways to Budget Better in 2017 Cathy Fregelette and John Herbstritt APhA Case Study Joseph Janela Solving the Problems with BI360 Nils Rasmussen Closing Comments and Q&A
  21. 21. • Individual Membership Organization • Founded in 1852 • 62,000 Pharmacists (chain; independents; academia; students) • Meetings, publishing, training programs, certification, government grants (HHS) • $36 million budget • 122 staff (38 budget managers) © 2016 BroadPoint Technologies | Slide 26
  22. 22. • Strategic Plan • Annual Budget Process • Monitoring the Budget © 2016 BroadPoint Technologies | Slide 28
  23. 23. What We Have: • Strategic Directions Committee • Written plan with mission, goals, objectives, tactics & KPM’s • Management teams involved in the process • Annual review to determine the top mission and top support goals What We Struggle With: • Linking the plan to the budget • Measuring & reporting on the KPM’s Priority for the 2017 Budget Process © 2016 BroadPoint Technologies | Slide 29
  24. 24. Expectation gap: • Staff wanted a “one-stop” budgeting software system “to prepare their budgets”. Timing 1 (Budget Staff): • Budgets needed to be prepared for the mid-Sept. Finance • Committee meeting; challenge with summer vacation schedules. Timing 2 (Finance Dept.): • Took time to generate, scrub, reclass, & distribute June financials (which squeezed Timing #1) Timing 3 (Finance Dept. & Executive Team): • Not enough time to critically review & modify the budget © 2016 BroadPoint Technologies | Slide 30
  25. 25. Various Methods Used to Prepare & Communicate the Budgets: • Calculations (Excel) • Narratives (Word documents) • Narratives in emails © 2016 BroadPoint Technologies | Slide 31
  26. 26. Expectation gap: • Education, education, education. Timing 1: • Expanded the time period for budget development. Timing 2: • Reduced the time for distributing reliable June financials. Timing 3: • Earlier budget cut-off & Implementation of BI360 Varying budget methods: • Developed standardized budget templates. © 2016 BroadPoint Technologies | Slide 32
  27. 27. Education: • Goal: get everyone on the same page (get “buy-in”) • Mandatory budget meetings • Detailed walkthroughs at the budget meetings • Hand-outs with screen shots & arrows for every step • Detailed chart of accounts with explanations and examples © 2016 BroadPoint Technologies | Slide 33
  28. 28. Timing 2 – Reduced the Time to Produce Timely & Reliable Financials: • Revenue Side Obtained an in-depth understanding of all revenue entry points and established procedures to acquire that info asap at month-end. • Expense Side Developed a standard A/P invoice form for easier data entry Established Strict cut-off dates for A/P, accrual & and payroll entries. • Financial Statement Side Developed trend analysis data to help identify unusual variances from the budget. © 2016 BroadPoint Technologies | Slide 34
  29. 29. Timing 1 - Expanded the Time for Budget Development: • With more timely & reliable June financial statements we were able to open & close the budget process earlier with more time in between (this was the big stress reliever) © 2016 BroadPoint Technologies | Slide 35
  30. 30. Timing 3 – More Time to Review & Modify the Budget: • BI360 Expedited the review process for me & the Finance dept. o Budgets were locked down when “submitted” o Able to review individual budgets as they were submitted o Developed financial reports in BI360 that combined related program budgets, which allowed me to review from an “activities” perspective vs. a “department reporting” level (i.e. the true financial picture of an activity) © 2016 BroadPoint Technologies | Slide 36
  31. 31. Timing 3 – More Time to Review & Modify the Budget: • Standardized Budget Templates o Calculation templates (revenue & some expenses) o Template for major expenses ($5,000 +) with basis for determining the budget amount o Template for major variances (+/- $10,000 AND >10%) with explanations for the changes © 2016 BroadPoint Technologies | Slide 37
  32. 32. © 2016 BroadPoint Technologies | Slide 38 o Staff using their own data for status reports to their senior manager. o Financials published late (reactive vs. proactive). o “Christmas surprise” (year-end results significantly higher than the projections developed in Sept & Oct).
  33. 33. © 2016 BroadPoint Technologies | Slide 39 o Finance took a more active role (numbers released to senior management, Finance Committee, & Board would come through Finance). o Developed historical trend analysis for revenue & expenses. o Published financials on a more timely basis. o Budget monitoring approach: Jan - April: concentrate on revenue (using trend analysis info) May - June: review of expenses (compared to budget) July - August: formal projections prepared by budget managers Sept – Dec: monitor projections for major variances
  34. 34. © 2016 BroadPoint Technologies | Slide 40 12 Ways to Budget Better in 2017 Cathy Fregelette and John Herbstritt Solving the Problems with BI360 Nils Rasmussen Closing Comments and Q&A APhA Case Study Joseph Janela
  35. 35. Nils Rasmussen - 27 years in the Business Intelligence industry - CEO and Founder of Solver - Author and speaker on BI subjects Solver - Founded in 1996 - 110 Employees and 220 reselling partners - HQ in Los Angeles, 9 International Locations - On Gartner CPM Magic Quadrant for 3rd year in the row in May, 2016 - 1,500 customers © 2016 BroadPoint Technologies | Slide 41
  36. 36. Overall Vision • Tying technology back to the Better Budgeting Approach™ How Solver supports each phase of the budget lifecycle (demo): • Strategy • Budget • Operations © 2016 BroadPoint Technologies | Slide 42
  37. 37. © 2016 BroadPoint Technologies | Slide 43
  38. 38. © 2016 BroadPoint Technologies | Slide 44
  39. 39. © 2016 BroadPoint Technologies | Slide 47 12 Ways to Budget Better in 2017 Cathy Fregelette and John Herbstritt Solving the Problems with BI360 Nils Rasmussen Closing Comments and Q&A APhA Case Study Joseph Janela
  40. 40. © 2016 BroadPoint Technologies | Slide 48 Budget Operate Strategize Align Your Strategies and Budget 1. Keep your eye on the goal 2. Get the right people involved 3. Meet in the middle 4. Align your technology to support your strategy Build Your Operational Budget 5. Choose the right tool for the job 6. Standardize & fortify the templates 7. Monitor workflow and approvals 8. Lock down your budget Live with and Love Your Budget 9. Implement an “early warning” system 10. Roll your forecast forward 11. Start planning early 12. Build one source of the truth
  41. 41. Contact BroadPoint for more information on available budgeting solutions that may fit your needs or to schedule a demo of the Solver BI360 System. John Herbstritt Cathy Fregelette jherbstritt@broadpoint.net cfregelette@broadpoint.net (301) 634-2406 (301) 634-2414 info@broadpoint.net (301) 634-2456 © 2016 BroadPoint Technologies | Slide 50

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