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Corporate finance managers often think of budgeting like Sisyphus thought of his boulder. A seemingly never-ending, futile task that just keeps repeating itself over and over again.

Does the following scenario seem familiar to you? The finance team sends out a dozen Excel spreadsheets to different departments across the corporation asking managers to complete the spreadsheets with necessary data, by a certain date. The date goes by. No managers return their spreadsheets. Finance nags. A few people return some “guesstimate” numbers. Finance nags further. Numbers get filled out. Then changed, then changed again, over and over again. After weeks of back-and-forth, the finance team finally gets what it deems to be enough accurate data from the various departments and begins the arduous task of manually entering the data from Excel spreadsheets into a corporate-wide ERP system such as Oracle EBS or JD Edwards.

Then someone comes back with a budget change. Rinse and repeat.

To some in corporate finance, annual or even quarterly budgeting can be one of the most difficult and time-consuming tasks they face all year. This is because budgeting is still dominated by Excel spreadsheets – a functional, familiar and simple tool, but one that isn’t always the most efficient – and within any budgeting process there is a lot of room for human error or procrastination.

Budgeting is such an arduous process that according to a 2006 Accenture report titled, “Budgeting and Forecasting: Issues and Leading Practices,” companies worth $1 billion or more will spend, on average, 25,000 working days defining budgets. The same report suggests that many companies will take up to six months or longer to finalize their budgets. While not all of us are responsible for billion dollar budgets, financial executives everywhere can agree that budgeting is a costly, tedious process that often results in data that could be irrelevant by the time it is complete.

To some finance managers, the only solution seems to be a massive overhaul of the entire ERP system. An expensive process that might not even solve the problem because users will reject new systems in favor of tools and processes they already know, most notably Excel. Rejecting the simplicity of Excel is almost always a mistake, and something that most finance managers won’t accept. Instead, corporate finance managers need to leverage the power of Excel and all its benefits, while still improving the process and cycles of budgeting.

The best solution is a simple add-on software tool that integrates with JD Edwards and streamlines budgeting from months to days by managing the workflow.

Too good to be true? Not so. There are software tools, such as Insight Budgeting and PlanGuru available specifically to help finance managers improve the budgeting cycle without having to overhaul their entire corporate IT systems and culture.

The benefits of using an add-on solution that integrates with JD Edwards and Excel are several-fold. The first is that it smoothes and automates the workflow. As we demonstrated earlier, one of the hang-ups within budgeting is that the process is dependent on people. People entering data, other people approving it, and then more people forwarding it on to others. With a budgeting tool embedded within JD Edwards, the budgeting process is organized and automated. This feature itself can dramatically change the corporate budgeting process because it drives significant accountability. People are notified of their turn and held accountable for doing their part: entering their data correctly and on time. What’s more because waiting for approvals can be almost as painful as waiting for the data itself, there is an ability to enforce approval by managers, who are often bottlenecks themselves.

So budgeting tools can manage workflow, but what about the inevitable back-and-forth with budgeting? The “oops, I need to change that number,” moments that happen deep within the Excel spreadsheets and create a domino effect of changes, errors and new approvals? Yes, that is minimized too because with the proper budgeting tool, corporate finance managers can lock down the data and embed security right into the spreadsheet itself. No more discrete changes that throw off everything, and managers are required to approve or reject changes, ensuring version control across the board.

You may think, “Ok, this is sounding like a nice time-saving tool for the budgeting workflow, but I know my executive management likes reports in the format and style they are familiar with.” Reporting is just another headache with budgeting because everyone wants to slice-and-dice the data in different ways. This can mean extensive manual formatting and time-consuming ad-hoc requests. A sophisticated budgeting tool will solve this problem by allowing finance managers to easily extract data from the ERP system in virtually any format and in virtually any stage of the process. Reporting should be the no-brainer, even if you’re running a custom report, comparing ledgers, or comparing actuals to the budget.

Finally, there is the issue of training. No one believes that finance or accounting will disavow Excel ever. And I don’t think anyone should. Excel has many advantages and teaching someone a completely new tool will only result in frustration and rejection. Instead, I firmly believe that Excel should be part of the budgeting process, but that teams can be trained on ways to integrate Excel with new tools. In just a few hours of training, most people can learn to use an intelligent budgeting tool integrated with Excel and JD Edwards.

Corporate finance managers sometimes feel faced with a no-win situation. Either they continue the budgeting process as usual, resulting in time-suck and aggravation, or they advocate a complete expensive transformation of their entire corporate culture and ERP system, to streamline the process. I don’t think it has to be one or the other. With the right software tool, corporate finance managers can stop the spreadsheet madness, while leveraging all the benefits of their ERP system and Excel. As a former corporate finance manager myself, I am on board.

 

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