For many, the second fiscal quarter represents the start of the eternal, never-ending budgeting process. For the next several months, your corporate finance team will manage, edit and track every single line-item, and use that data to make educated predictions about the company’s overall and departmental assets.

This can be painstaking work, particularly if yours is one of the many enterprises that has yet to even finalize its 2013 corporate budget. According to an Accenture (News - Alert) report, each year “…companies worth $1 billion or more will spend on average 25,000 working days defining budgets, and many companies will take up to six months to finalize theirs.”

Most CFOs will say that the single biggest time drain during the budgeting cycle is not analyzing the data, understanding the numbers or otherwise evaluating the intelligence in them, but instead the biggest headache is orchestrating the process. Why? Because the finance team typically sends out requests to different departments across the corporation asking managers to complete spreadsheets by a certain date, and gets zero to little response. If your enterprise is anything like most, an inter-department e-mail asking for an administrative task doesn’t usually merit priority action.

After weeks of nagging managers and dealing with ‘version control,’ 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 (News - Alert) EBS or JD Edwards.

This can be maddening for finance teams, but more importantly, to a corporation, this colossal inefficiency prevents the company from using real-time budgeting data for valuable business intelligence. No company can leverage budgeting BI if the numbers aren’t even in the system yet.

Certainly the solution isn’t to just stop budgeting. Budgeting is critical to a corporation’s business because it establishes the overall course for a company to follow. Conditions for the course are constantly changing, so it's critical to reset paths and objectives to achieve goals. Similarly, if you're trying to get to the end of a forest, you have to walk around a few trees.

Instead, the solution is to speed up the budgeting process so teams can get their hands on the numbers and start making important business decisions.

CFOs and finance managers agree that budgeting is inherently difficult, primarily because it is a truly manual process. Unlike other data collection and prediction models that are software-driven, budgeting relies on real people who can provide accurate, on-the-ground specifics about market conditions, expenses, opportunities and threats. And due to the “real live person” nature of budgeting, just about every organization relies on easy-to-use tools that people across the organization – from sales to HR to operations to marketing – can use. That tool is almost always Excel.

Excel is a tried and true budgeting tool and for all its limitations - particularly around workflow - few finance teams have seriously contemplated completely ditching Excel for a new tool. Instead, smart enterprise finance teams have found the key to a faster budgeting process is workflow automation coupled with Excel rather than a tool that competes with it.

That’s where the critical connection between budgeting and ERP systems comes into play. Enterprises that rely on ERP can easily improve their budgeting efficiencies through the use of smart software tools that are layered over ERP systems. Smart tools, like Insight Budgeting from InsightSoftware.com or PlanGuru, enable users to make online submissions and upload budgets directly into JD Edwards. Rather than relying on a controller to send e-mail reminders and bug managers to complete the forms, intelligent budgeting software can automatically bring managers over to their required tasks, offer reminders and even let budget managers know when they have started the process.

The workflow efficiency is truly astounding, with most organizations reporting that budgeting tools that integrate with Excel and their corporate-wide ERP systems save them days, if not weeks, off their budgeting time.

And as most finance teams will attest, there is rarely a more valuable asset than time in any business. 

Budgeting tools can manage workflow, but they can also prevent the inevitable back-and-forth in the budgeting cycle. The negotiations among directors, the headcount changes and the re-organizations that happen deep within the Excel spreadsheets and create a domino effect of changes, errors and new approvals, can all be managed with the proper budgeting tool. Armed 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.

InsightSoftware.com worked with URS Flint, a North American fully integrated upstream and midstream construction and production service provider. The company’s director of corporate accounting was all too familiar with the spreadsheet madness typical of corporate budgeting.

“We used to have each division in our company create their budgets within separate Excel spreadsheets and the information would be manually entered into the JD Edwards, a very labor intensive process. Being able to have the data immediately uploaded into JD Edwards has saved us immeasurable time and reporting is much easier.” 

For some companies, like URS Flint, budgeting tools have shaved weeks off the process, and for others, intelligent software has enabled them to move to a monthly budgeting process that is better aligned with how they operate and becomes a standard task, rather than an annual headache.

There is no question that budgeting is a necessary evil in any corporation. There will always be an inherent element of human error and best guesses that comes with any type of prediction. However, for the best business intelligence that can truly help a company make smart business decisions, and help transform a finance team from bean-counters into strategic partners in the business, moving to a more efficient and streamlined budgeting process can make a significant difference.

Real-time, accurate and efficient budgeting is a cornerstone of any successful financial business intelligence.