Product Tips: Tracking the Evolution of a Budget from Start to Finish

The budget cycle is often like the old game ‘telephone’ - you start at one point, but what comes out the other end is completely different. In the budgeting version of this you are asked at the beginning of the budget process to submit the budget for your center or department, only to see a completely different number at the end of the cycle.

Budgeting for Success

Moving away from the annual budget process and into one that is more frequent is a core topic in the recent eBook from The rationale behind it - business changes so frequently that the annualized budget gets out of date pretty quickly. The fact that employees’ performance, and often compensation, is based on this annual plan makes things worse as the battle for the budget usually ends up with a much more conservative, thus achievable, plan. This pretty much makes it out of date out of the gate.

What to do?

The Productivity Paradox: Accounting for Returns on IT Investments

There has always been somewhat of a struggle between the IT department and “management”, much of the difficulty existing with the need to demonstrate clear returns on investments for IT purchases. Unfortunately, expenditures in information technology are often the result of short-term views of long-standing problems, applying “solutions” that do not fully address the requirement or which do not deliver the productivity or performance gains expected, particularly in a dynamic and rapidly changing business environment. The assumption is that a wise investment in information technology will result with improved profitability and performance. [But} demonstrating this on paper is not always easily accomplished.

The Crisis of Competency in Accounting and Finance

The roles of today’s accounting professionals are being reinvented, requiring new skills far beyond audit, tax and compliance competencies.

The finance function is a key part of business strategy, but many professionals don’t learn the skills needed to develop strategy, inform decision making, or communicate with influence. “Accountant” remains one of the hardest jobs for employers to fill, and 50 percent of finance executives can’t find staff with the right skills. This talent gap is, in fact, a crisis.

This “Competency Crisis” has gone unsolved for decades, and it’s affecting businesses’ operations potential for future growth. The problem has been studied at length by academics and professional accounting organizations. A variety of factors, including a narrowly focused accounting curriculum and lack of on-the-job training, are part of the problem, but clearly, there is no silver bullet that will make accounting and finance professionals excel at a global level.

Finance Transformation: Five Mistakes to Avoid

Even the most high-performing finance teams occasionally slip up – especially when trying to transform the way their department operates. Only 12% of finance leaders responding to a recent survey said their transformation projects achieved all of their intended business outcomes.

Through our research into finance transformation, we’ve identified five common mistakes many CFOs make:

Budget Gem 2: Link Budgets To Operational Activities.

I’m always amazed at how tenuous the link is between strategic goals and budgets. Most senior managers will claim that the budget process is there to help the organisation implement strategy, and yet when you look at the submission sheets budget holders are asked to complete, there is no link. Sure, the revenues and costs when accumulated with other departments may equate to a strategic target, but budgeting is much more than this. After all we can get a monkey to fill in those sheets and even get them approved by ensuring they line up with targets set by senior managers. But we all know that the numbers themselves are meaningless unless they have been placed in context of organisational activities.

Don’t Set and Forget Your Budget

Starting your own business is both an exciting and nerve-racking adventure, I’ve been there. Just a few weeks ago I was fortunate to meet with a bunch of people at the cusp of starting their own businesses.

At the event I ran by PushStart, I was able to share my experiences and the virtues of accounting software with these young entrepreneurs.

It’s clear that not everyone who starts a business has the same level of accounting knowledge. For some the idea of managing numbers is overwhelming, while for others they may have studied accounting at university. But I truly don’t think it matters. New online accounting solutions are making managing your own finances simpler, but even traditional desktop type products are really quite easy once you’ve had some training. In this article I’ll cover off a few of the things I shared at the PushStart event.