Top 5 benefits of budget management software for forecasting and planning

from Unit4 Communications February 28, 2023 | 4 min read

Organizations use budgeting and forecasting software within their financial planning and analysis (FP&A) to map out the financial resources they will need to support their business activities in the future and to help them estimate future revenues and expenses across the business. Business leaders use it to create budgets and forecasts for each department, and finance teams use budgeting and forecasting solutions to bring together all the individual budgets to develop an overall budget for the whole company. They can then define how funds will be allocated to each department and identify potential changes in their revenues and expenses, which may impact the bottom line.

There are plenty of accounting management technology products available offering basic budgeting features, but when advanced functionality is needed, organizations must consider an FP&A solution that integrates with ERP and other software across the business to give them a single source of data truth.

Budgeting vs. forecasting

Budgeting is working out how much you will need to spend to reach targets and achieve goals and results. Forecasting is analyzing the budget and using historical and real-time data to predict what those results will look like.

Budgets provide a road map that focuses on key financial goals that track and monitor progress. But, of course, circumstances and market conditions change, so finance teams need to regularly review the budget against the changing business environment. They can then duly forecast to determine what their results might be and can adapt planning activities as needed.

Forecasting helps organizations plan their next steps with a clear understanding of what measures they need to put in place to grow. It also allows them to develop smart short-term and long-term goals.

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The benefits of budgeting management software

Budgeting management software assists organizations in responding to change with agility and speed. It goes beyond basic planning by connecting detailed financial and operational data from across the enterprise so plans can be looked at in more depth and adapted more regularly. When finance teams are empowered with granular plans with specific outcomes, best practice processes, and solid data, they will be on track to achieve goals more effectively.

Here are our TOP 5 benefits of budgeting management software:

1. Improved Accuracy

Proper budgeting means organizations have more control over their operations and where they spend their finances. Continuous budgeting, forecasting, and planning keeps funds in check and reduces or eliminates budget overruns. Revenues and expenses can’t always be predicted precisely, but budgeting software allows any changes to be tracked accurately so tweaks can be made where necessary. By providing built-in workflows and embedded version history, budgeting and forecasting solutions minimize errors and speed-up approval processes. When budgeting management solutions are integrated with other back-office systems, guesswork is removed, so everyone has real-time cost data available, and decision-making is based on accurate numbers. Plus, human error can have a tremendous effect on your organization’s profitability. Some errors may seem insignificant, but they can add up and impact the integrity of data and dent the bottom line.

2. Time savings

The time taken up by manual consolidation of large volumes of financial data has significant cost implications through lost productivity. With the right software in place, businesses can reduce the process of producing an annual budget from several days to just minutes and better monitor and improve their financial performance. The right budget management software will significantly cut down time spent on repetitive tasks, automatically updating numerous account types, such as expenses, cost of services provided, and revenues. Automatic updates save time on manual updates and reduce the time used to formulate a budget for the next financial year. It also stores all financial records in a central place, increasing the speed and efficiency of locating information.

3. Enhanced reporting

Having a single, centralized finance solution enables financial responsibility to be devolved. Budget owners can enter their data directly and analyze it in different ways, generating reports on demand while being empowered to keep track of their spending against their original forecasts. Budgeting and forecasting solutions provide a similar environment to spreadsheets but offer greater flexibility and reporting efficiencies. By eliminating manually intensive processes, the time taken to produce forecast reports can be massively reduced.

4. Better scenario management

Scenario management is a layer of planning beyond standard forecasting exercises. It is a technique used in FP&A to help guide organizations through considerable uncertainty, contemplating various paths of possibilities. Despite best attempts, forecasts will have inherent errors, and actual results will deviate from the figures an organization anticipated hitting. Budgeting and forecasting tools use key business and value drivers as a basis for creating different scenarios. This allows the company to almost create a future reality before future reality occurs.

5. Improved decision making

Together, budgeting, forecasting, and planning form an important pillar of an organization’s overall success and security. Integrated budgeting management solutions streamline the entire budgeting cycle, bringing substantial efficiency savings. Decision-making is improved, problems can be identified before they occur, and performance can be continually monitored. Additionally, a company’s people will have more time to focus on value-adding tasks, which will increase their productivity.

How can Unit4 help with effective budgeting management?

With the right technology supporting you, your organization can manage revenues and expenses accurately with an FP&A solution that integrates with ERP and other software across the business to give you a single source of data truth.

Our people-centric, project-focused solutions are purpose-built. Organizations can better manage their operations with industry-leading software for Financial Planning and Analysis (FP&A), Enterprise Resource Planning (ERP), and Human Capital Management (HCM).

You can check out Unit4's People Experience suite here.