Budget Workflow Improvements

Budget SpreadsheetThe Budget Spreadsheet

In 1989 I joined the business office of a large university. As a special projects coordinator, one of my first duties was to set-up a budget workflow process for the entire university administration that utilized a common spreadsheet format. Prior to that point, budgets were created and submitted on paper forms. That left room for many errors, such as incorrect account numbers, totals footing correctly, and so forth. Also, university staff continually created their own line items, which my boss (the CFO) didn’t appreciate.

The budget spreadsheet allowed the user to input the requested budget amounts into the line items contained in the spreadsheet. The line items and totals were protected, so totals calculated correctly, and line item categories couldn’t be changed (and no additional line-items could be created). In addition to those benefits, rather than manually entering the amounts into our AS400 system, we were able to import the data, again eliminating much manual effort and the resulting opportunities for error. Of course, we had to manually “upload” the data into the main system and then review for overall completeness and accuracy. There were always issues, but we were light-years ahead of where we were just a couple years before.

Fast-Forward to Today

Fast-forward to today, and many companies are still using this process, thinking it’s the “cat’s pajamas”. Well, it’s about as modern as that saying. Remember, that was 1989. Twenty-six years ago! There are now much more sophisticated budget workflow processes available to savvy users.

The most efficient process I’ve seen works something like this. The accounting system automatically creates a budget template for each budget area or cost center. The template uses the appropriate codes for each of the responsible budget parties based on their account restrictions (those accounts they have responsibility over), including appropriate GL and sub-account combinations. The “working budget” template can be initially populated using historical data (averages or period matching), or “zero based” budgeting can be used. In addition, historical data (such as prior year actual or budget) can also be included as separate columns.

The responsible party is notified of the budget template availability via an e-mail. The responsible party can then access the system and create budget requests within the template, along with complete justifications. They may request individual amounts, an overall percentage increase, etc. When their request is complete, they are able to indicate as such and the manager is then notified as to its readiness for review and/or approval. The manager can then review their requests and approve them, or ask questions and return the budget for further modification. Multiple levels of review can be included for larger organizations.

Once the budget is ultimately approved, it is then posted to the system automatically. No import process is required. All account and date validations are handled by the GL system, and of course, the budget is then available for comparative reporting, revenue/expense control, etc. In many systems you can have multiple budget versions, project budgets, and so forth.

So let’s not get “stuck in the 80’s.” Take budgeting to the 21st century with budget workflow!

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About the Author

John S. Francis is currently an advisor for AccountingCloud.net. From 1996 to 2009, he was founder and President of one of the country’s leading accounting software implementation firms. Acknowledged as a “Top 100 Technology Pacesetter” and a “Killer VAR” by Accounting Today magazine, as well as a “Top 100 Value Added Reseller” by Accounting Technology magazine, his firm successfully managed accounting system implementation and training engagements for thousands of clients worldwide. He has been a resource of information and has consulted on the development of CompareAccountingSoftware.com.