How can public sector and non-profit organizations create, monitor and forecast better budgets to maximize efficiency? By moving from a legacy spreadsheet system like Excel, to a more innovative database solution like Questica.
Efficiency is front and center for organizations that want to maximize the value of their budgets. However, decentralized spreadsheets can become riddled with human error and lengthen the duration of the budgeting cycle. Ultimately, the organization’s time and money is wasted. Likewise, if moving along forecasts and variance reports requires hours of tedious manual labor, this drains organizational resources that are better spent elsewhere.
Here are five common problems that cripple the efficiency of organizations of every size—and how Questica can help.
Problem: Human error limited efficiency
Solution: A unified database eliminates dangerous duplicates and reduces mistakes
Manual entry is the cornerstone of most spreadsheet-based budget processes, leaving an organization vulnerable to inaccuracies, data gaps and broken links. It’s not just typos that are to blame. With multiple versions of the budget floating around, it can be dangerously easy to update the incorrect one — and frustrating to figure out if the version is actually accurate. Budget analysis with a spreadsheet is equally as fraught with mistakes.
By aggregating financial information in a database, organizations drastically reduce the inefficiencies that result from having multiple versions of the same budget in play. Everyone who is authorized to access the system can see the most up-to-date numbers at a glance, and the platform’s functionality allows users to view previous versions of the budget in one centralized place. Budget analysis also receives an efficiency boost, as consistent data presentation and aggregations make human error far less likely.
Problem: Duration of the budging cycle is too long
Solution: Efficient collaboration is built into web-based budgeting systems and saves time
Interdepartmental collaboration drastically reduces the time it takes an organization to forecast, refine and finalize a budget. Yet the widespread use of spreadsheets is a major hindrance to collaborative budgeting. This is because it’s difficult to enforce a standardized approach and format when each department manages its own cost and spending data in spreadsheets.
Variations don’t just make it difficult for senior managers to compare budgets across departments — they make it difficult for department heads to share insights and solve problems together. Additionally, when a draft budget needs revisions, updating multiple spreadsheets takes an enormous amount of time and slows down the entire budgeting cycle.
Budgets created in a web-based system, like Questica, are accessible from any computer with an Internet connection and can be utilized by multiple employees at the same time. An automated workflow with custom approvals keeps the budget moving along swiftly and efficiently—no need to follow up with someone when a draft of a spreadsheet languishes in his or her inbox. Because the budget is housed in a database, it’s easy to make changes during the creation, approval process and monitoring of the budget — all of which are tracked within the platform for administrators to review if necessary. These adjustments don’t require the tedious, time-intensive chore of sorting through spreadsheet versions. Instead, all the most up-to-date budget information is right at colleagues’ fingertips.
Problem: Versioning is a scattered, time-intensive process
Solution: Easily conduct versioning throughout the year with a database
Many organizations that used spreadsheet-based budgets put off version comparisons and analysis because it’s a lengthy and complicated process. With spreadsheets, each saved file represents a version. Comparing and analyzing those documents requires opening multiple files and finding ways to simultaneously view them — a major hurdle that’s anything but efficient.
With a database, versioning is easy. A simple drop-down selection allows you to access an unlimited number of records. Users can select a powerful drill-down functionality to make root cause analysis almost effortless—no side-by-side printouts of spreadsheets required. Additionally, rather than formatting reports one by one with spreadsheets, a database allows users to efficiently craft custom reports. Because the process is so much more efficient, departments are less likely to put it off, and organizations can use version analysis consistently throughout the year to prepare for the next budget cycle.
Problem: The budget’s audit trail is disorganized
Solution: A history of changes lets you confidently weather an audit
The integrity of data is paramount in a financial environment. But a budget system that’s built on spreadsheets leads to more questions than clarity: When were these numbers changed? Who changed them? Why?
Trying to answer those questions in the face of an audit is a daunting task that demands both time and resources. Rather than efficiently responding to an audit, the team must instead scramble
and backtrack to find the answers themselves first.
In contrast, the audit trail for a database budget is one marked by efficiency. All the budget details are automatically recorded and any changes in values are time-stamped and user-coded. It’s easy
to see who changed what and when, which removes the need for multiple spreadsheet copies. Not only can the team be confident about the integrity of its data, but it can also face an audit with confidence.
Problem: Variance reporting is cumbersome and clunky
Solution: Easily conduct versioning throughout the year with a database
In many organizations, variance reporting is an efficiency killer. Someone in the finance department must export the actual costs from the entity’s financial solution, and then share that data with the individual departments. Spending and budget comparisons typically require a time-consuming process of formatting and realigning the numbers — all while being mindful that it’s easy for human error to be introduced. The process is so inefficient that most departments receive quarterly variance reports at best.
When departments have access to a database solution, like Questica, variance reporting can be efficient. Once integrated into the financial and/or Enterprise Resource Planning (ERP) system, expenditures are automatically imported at the interval decided on by the organization, typically on a nightly basis. Departments then access variance and other reports without having to go through the finance department, leaving the finance team with more time to focus on the reporting and analysis that are central to its core value.
How Questica can help
Budgeting for all public sector and non-profit organizations is a year-round practice. While the annual budgeting cycle may take place during specific months of the year, versioning, variance reports, forecasting and more occur on a regular basis. By implementing a highly configurable budgeting solution like Questica, entities enable themselves to reduce errors and improve efficiency not only during the pivotal budgeting cycle but throughout the entire year.