Faced with constraints and demands for improved services, modern organizations at every level are discussing, experimenting with, and implementing new ways of budgeting. The budget process is increasingly being seen as a tool to promote corporate accountability and effectiveness, rather than simply as a vehicle for allocating resources and controlling expenditures. The traditional budgeting process was typically believed to be a high effort and low value added process, with typical characteristics like:
• A disconnection between strategy, budgeting and performance management as no line ownership for budgets existed
• Budgeting cycle was too long as multi-levels of approval were required
• Budgets were too detailed, the focus being given to data collection rather than synthesis, analysis and interpretation
• Straight lined budget - seasonality was ignored
• No budgeted balance sheet or cash flow statements were produced
• System support was inadequate contemporary budgeting however, has been defined as a system wherein managers are provided with the flexibility to utilize resources as required, in return for their commitment to achieve certain performance results. In addition, proper budgeting enables effective planning of the company’s operations and serves as a monitoring tool, coordinating actions and initiatives between the various organisational units. Generating a sound budget means looking beyond your own walls.
Our financial management practice will review general economic and industrial trends along with factors unique to your business, in order to provide hands-on support and accomplish effective process transformation, insuring the development of realistic financial performance goals and budgets. This will be ensured by the fact that our professionals have specialised experience in all different types of budgeting (activity based budgeting, zero based budgeting, strategic budgeting, budgeting on a rolling basis) and are capable of providing specialised advice on budgeting results interpretation / highlighting areas for Improvement. The latter can be accomplished through variance (actual versus budget) reports interpretation and analysis, design of standard budgeted vs. actual reconciliation reports, behavioural issues resolution, on-going system etc.
It is important to mention that streamlining the budgeting process alone, without “fine-tuning” the budgeting system and the budget control points will render only a fraction of the expected benefits. That is why the complementary skill set of our financial management professionals will make the difference in creating the best budgeting framework fitting your company needs and distinct characteristics.