3 Essential Elements of a Budget:
People, Data, Process
A budget, whether done annually or conducted throughout the year, is a critical component for any organization. A successful budget must connect three major elements – people, data and process. A breakdown of any of these elements can have a major impact on the results. So, how do you bring together the 3 essential elements of a budget? Here are some tips:
Your team is the essential element to starting a budget. Any individual, who is not engaged or accountable, is likely to create a substandard budget. What can you do to keep your team connected? First provide reasoning behind the task. If your team understands the importance of the budget, and their role in creating it, you give them motivation to provide accurate contributions based on their effort. Second, give your team time to build a quality budget – don’t just provide a template without direction and expect your team members to find time in their schedule to complete it.
Data is an obvious element, you can’t create a budget without raw numbers. There are several sub-elements that are key here:
- Detail – your team will want to capture as much detail as possible.
- Drivers – examine everything that drives your cash flow.
- External information – provide any outside information that might be useful to the contributors or reviewers.
- Timeliness – make sure data is as up-to-date as possible.
Process is the element that brings everything together. If your process is inflexible or outdated the end result may yield a sub-par budget. There are several factors to help to perfect a successful process:
- How easily can your team access the system, data and components they need to do their job?
- How secure is your information?
- How often are your numbers being reviewed or amended?
Your process should insure that these factors are addressed, which will lead to a budget that reflects your company’s current trends, funds and predictions.
TRUE SKY ANALYTIC SOFTWARE
Therefore, ensuring that these 3 essential elements are in place, is the only way to garner real financial truth and achieve your company’s ideal business budget.
True Sky Analytic software strives to connect the 3 essential elements of a budget to ensure promising end results and made to work with your Sage ERP system. You can request a brochure and additional information by completing the form below or by visiting True Sky’s Website today.