Budgeting process

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Christian Babbini Driver-based budgeting and planning (DBBP)

A good budget model is a complex set of data and constraints. But with the right approach, it can be simplified by focusing on the right cost drivers allowing a realistic image of the organization’s costs.

Moving beyond the spreadsheet or the way to optimize your budgeting process

DECIMAL'S BUDGETING SOFTWARE GIVES USERS THE ABILITY TO PREPARE, MANAGE, TRACK AND CONTROL THEIR BUDGETS, FORECASTS, PROJECTIONS AND SCENARIOS.

The way organizations manage information has changed drastically in the past 20 years, and the arrival of integrated management systems (ERP) has revolutionized the way operational transactions are processed. However, although these new systems do a good job supporting transactions, the method used to actually predict costs has evolved very little. In fact, many North American organizations still use spreadsheet programs such as Microsoft® Office Excel to do their budgeting process and planning (forecasts, projections and scenarios).

If ERPs do a great job of effectively structuring and efficiently storing the organization’s operational data, nevertheless they are not flexible enough to prepare forecasts and scenarios. Spreadsheet programs started to appear (in the 90s). As inexpensive tools, they slowed up the urgency to improve the organisational processes.

Budgeting pitfalls with overusing spreadsheets.

However, in the past decade, organizations have started to realize that even spreadsheets can have their limits. Boards of Directors are demanding more information about budgets and internal control requirements, forcing organizations to acquire a specialized budgeting software to meet these demands.

Decimal Suite features efficiently manage your budget, excluding possible budgeting pitfalls as planning errors, losing expertise when an employee leaves, inability to monitor cost reduction initiatives, to monitor variances or to provide relevant and timely information.

  • Consolidates data in a centralized database providing simultaneous access to several users;

  • Enables all managers and authorized users to enter budget data directly while keeping track of changes made;

  • Defines each user’s specific profile, security profile and access to information;

  • Creates scenarios based on calculation rules at different levels (account, type of account or specific parameter);

  • Establishes budget expenses based on volumetrics;

  • Organizes data according to needs (chart of account, administrative units, etc.);

  • Produces dynamic reports and provides features that enable users to easily calculate variances, make multidimensional tables and drill-down as far as detailed calculations of account forecasts;

  • Reports can be viewed on-screen, printed or exported to other systems, including spreadsheet programs such as Microsoft® Office Excel;

  • Contains fields for entering and/or attaching justificatory and/or explanatory notes and files;

  • Tracks organizational changes;

  • Where required, accepts more details than are normal in a budget item.

The Decimal Suite's unique proposition 

PROCESS MANAGEMENT
Decimal Suite has been based on process management. Early versions were mainly used as sequential transformation processes. Soon after, the Decimal Suite was developed to support the more traditional cost allocation models often used by service companies. Today, these service companies are increasingly adopting the concepts of operational companies who are more likely to optimize and relocate resources to struggling sectors, control operational constraints and bottlenecks, analyse cost structure and behaviour, etc, to keep businesses running and profitable.
GLOBAL COST AND BUDGETING APPROACH
The Decimal Suite follows a global cost and budgeting approach. The Suite's modules support the implementation of a complete cost and budget establishment system. Budgeting process results allow users to determine costs of products and services. Conversely, the design of a cost model is used as a foundation for designing the budgetary process. This unique global approach ensures two things; first, that sales objectives are based on an informed selection of products and services, second, that managers keep track of results and effectively catch and understand discrepancies in the budget.

The Collaborator module, is decentralized to allow managers of different executive groups to personally enter their budgetary data. It is built directly within the Modeler module, which analyses trends in company costs. 
COMPARISON OF COMPETING COST MODELS
This provides management with a global and detailed view of the affordability of each model's performance. Designed to modelize budgetary, actual, forecasted and hypothetical results such as acquisitions, relocalization, and other major decisions, the Decimal Suite consolidates and compares results and shares this business intelligence with a company's key players.
DEVELOPMENT OF STANDARD MODELS
Ensuring effective benchmarking between operational entities (factories, departments, etc). At the same time, the managers of these entities may define data according to their operational realities directly within the global structure of the master template. This approach allows users to benefit completely from the thoroughness of a centralized system and the flexibility of a spreadsheet.
MAXIMUM SCALABILITY FOR PROJECTS
The application services clients of all sizes. Whether it's for profit organization, a private or public company or a public organization (municipal, provincial or federal), the Decimal Suite clarifies the strategic decision-making process, allowing companies to reach corporate objectives. Regardless of the number of users or information required by management, the Decimal Suite offers a unique and scalable potential.
ACTIVITY-BASED MANAGEMENT PROCESS
In any company in which individual entities can establish performance evaluation guidelines and consistent comparison criterions. Companies will see the success of the solutions implemented, as the strategic decisions taken will have measurable impact on the general performance of the company.


Planning and Budgeting Management brochure