12 ways to budget better

June 17, 2016 | Webcast

CathyFregeletteFinancial Practice Director,BroadPoint

JohnHerbstrittChief Solutions Architect,BroadPoint

NilsRasmussenCEO,Solver

© 2016 BroadPoint Technologies | Slide 2

JosephJanelaCFO,APhA


12 Ways to Budget Better in 2017Cathy Fregelette and John Herbstritt

APhA Case StudyJoseph Janela

Solving the Problems with BI360Nils Rasmussen

Closing Comments and Q&A


Budget

Operate

Strategize

Align Your Strategies

and Budget1. Keep your eye on the goal

2. Get the right people

involved

3. Meet in the middle

4. Align your

technology to support

your strategy

Build Your

Operational Budget5. Choose the right tool for the job

6. Standardize & fortify the templates

7. Monitor workflow and approvals

8. Lock down your budget

Live with and

Love Your Budget9. Implement an

“early warning” system

10. Roll your forecast forward

11. Start planning early

12. Build one source of the truth

Budget

Operate

Strategize

That’s why nearly 1 in 3 associations don’t do it – and those that say they do, 19% don’t even write it down!

Your strategic plan must drive your budget, and your budget must be allocated among your strategic initiatives. Period. Do you have an actionable strategic plan? Do you link your financial budget to drive your

strategic outcomes?


Strategic planning is difficult


RED FLAGS Do you have a roadmap for your business?

Are you monitoring indicators related to you eco-

system?

If you ask 10 people what the goals are, how many

different answers will you get?

BEST PRACTICE Introduce how organizational goals actually link to

initiatives

Set SMART goals to track progress

Align your strategic plan to

monitoring mechanisms

#1 – Keep your eye on the organizational goal

#2 – Get the right people involved


RED FLAGS Finance or Operation teams are disconnected

from executive strategic planning

Limited insight on the progress of your

division/ department/ fund/ project managers

Manager wearing multiple hats

BEST PRACTICE Revisit your organization chart

Identify teams and roles to ensure buy-in to

the plan

#3 – Meet in the middle


RED FLAGS Cannot meet strategic goals with budget

process

Top-down strategy does not match bottom-up

team member input on a consistent basis

BEST PRACTICE

Realign operational plans to achieve strategic

goals

Establish and enforce your budget alignment

through a central database process

#4 – Align technology to the strategy


RED FLAGS Strategy PowerPoint Budget Spreadsheets

Difficult to get insights from financial system

to understand progress against goals and

strategic initiatives

Key operational information is missing in

budget

BEST PRACTICE

Financial System – Configure it to report on

your strategic progress

Other Systems – Make necessary changes to

other systems to provide critical data

Budget

Operate

Strategize


#5 – Use the right tools for the job


RED FLAGS A spreadsheet only approach resulting in

multiple data sources

Cutting, pasting & re-entering

the same data

Unstable macros

No version control

Manual consolidation and roll-up

BEST PRACTICE

Approach your budget with an integrated set

of tools

#6 – Standardize & fortify budget templates


RED FLAGS Different spreadsheets per department or

manager

Provided templates not being used

Template being altered or changed

BEST PRACTICE

Build a standard template and share it with

your team

Tie your template to the data source

Lock down the ability to modify templates

#7 – Monitor workflow & approvals


RED FLAGS No structure for approvals

Unable to track the progress of the budgeting

process

BEST PRACTICE

Create a collaborative portal for teams and

budget managers

Formalize the flow of approvals

Provide real-time visibility of budget status

#8 – Lock down your budget


RED FLAGS Budget is not finalized

Budget is not uploaded into your financial

system or your budget database

Unauthorized budget changes post board

approval

BEST PRACTICE

Implement system controls to restrict budget

entry or changes

Budget

Operate

Strategize

Manual & Retrospective

Your budget has been approved, but now that means you need to live with it… and within it!


#9 – Implement an “early warning” system


RED FLAGS Caught over-budget and too late to react

BEST PRACTICE

Provide stakeholders with year-to-date actuals

vs. budget in real time

Implement a solution to monitor the

conditions on a timely basis

Configure automated alerts for over/ under

target

#10 – Roll your forecast forward


RED FLAGS Relying on month-old financial data to make

critical business decisions

Unable to project where you will land at the

end of current period… or fiscal year

BEST PRACTICE

Provide a view of the year with your actual,

budget & forecast to-date

Reevaluate assumptions and adjust forecasts

based on changes in market conditions

#11 – Start planning early


RED FLAGS A “Big Bang” budget approach near year-end

Limited to no forecasting

BEST PRACTICE

Reforecast on a regular basis to be a step

ahead for next year’s budgeting process

Automate estimates of future periods based

on your 12 month trajectory

#12 – Build one source of the truth


RED FLAGS No one place to go for the latest numbers

Every department has its own method for

monitoring and managing budget

BEST PRACTICE

Deploy common portal to entire organization

for collaboration on the “GBU”

Adoption and access for managers &

stakeholders to vetted reports and budget

entry templates

• Individual Membership Organization

• Founded in 1852

• 62,000 Pharmacists (chain; independents; academia; students)

• Meetings, publishing, training programs, certification, government grants (HHS)

• $36 million budget

• 122 staff (38 budget managers)


• Strategic Plan

• Annual Budget Process

• Monitoring the Budget


What We Have:• Strategic Directions Committee

• Written plan with mission, goals, objectives, tactics & KPM’s

• Management teams involved in the process

• Annual review to determine the top mission and top support goals

What We Struggle With:• Linking the plan to the budget

• Measuring & reporting on the KPM’s

Priority for the 2017 Budget Process


Expectation gap: • Staff wanted a “one-stop” budgeting software system “to prepare their budgets”.

Timing 1 (Budget Staff):• Budgets needed to be prepared for the mid-Sept. Finance

• Committee meeting; challenge with summer vacation schedules.

Timing 2 (Finance Dept.): • Took time to generate, scrub, reclass, & distribute June financials

(which squeezed Timing #1)

Timing 3 (Finance Dept. & Executive Team): • Not enough time to critically review & modify the budget


Various Methods Used to Prepare & Communicate the Budgets:

• Calculations (Excel)

• Narratives (Word documents)

• Narratives in emails


Expectation gap:

• Education, education, education.

Timing 1:

• Expanded the time period for budget development.

Timing 2:

• Reduced the time for distributing reliable June financials.

Timing 3:

• Earlier budget cut-off & Implementation of BI360

Varying budget methods:

• Developed standardized budget templates.


Education:

• Goal: get everyone on the same page (get “buy-in”)

• Mandatory budget meetings

• Detailed walkthroughs at the budget meetings

• Hand-outs with screen shots & arrows for every step

• Detailed chart of accounts with explanations and examples


Timing 2 – Reduced the Time to Produce Timely & Reliable Financials:

• Revenue Side

Obtained an in-depth understanding of all revenue entry points and established procedures to acquire that info asap at month-end.

• Expense Side

Developed a standard A/P invoice form for easier data entry

Established Strict cut-off dates for A/P, accrual & and payroll entries.

• Financial Statement Side

Developed trend analysis data to help identify unusual variances from the budget.


Timing 1 - Expanded the Time for Budget Development:

• With more timely & reliable June financial statements we were able to open & close the budget process earlier with more time in between (this was the big stress reliever)


Timing 3 – More Time to Review & Modify the Budget:

• BI360

Expedited the review process for me & the Finance dept.

o Budgets were locked down when “submitted”

o Able to review individual budgets as they were submitted

o Developed financial reports in BI360 that combined related program budgets, which allowed me to review from an “activities” perspective vs. a “department reporting” level (i.e. the true financial picture of an activity)


Timing 3 – More Time to Review & Modify the Budget:

• Standardized Budget Templates

o Calculation templates (revenue & some expenses)

o Template for major expenses ($5,000 +) with basis for determining the budget amount

o Template for major variances (+/- $10,000 AND >10%) with explanations for the changes



o Staff using their own data for status reports to their senior manager.

o Financials published late (reactive vs. proactive).

o “Christmas surprise” (year-end results significantly higher than the

projections developed in Sept & Oct).


o Finance took a more active role (numbers released to senior management, Finance Committee, & Board would come through Finance).

o Developed historical trend analysis for revenue & expenses.

o Published financials on a more timely basis.

o Budget monitoring approach:

Jan - April: concentrate on revenue (using trend analysis info)

May - June: review of expenses (compared to budget)

July - August: formal projections prepared by budget managers

Sept – Dec: monitor projections for major variances

Nils Rasmussen

- 27 years in the Business Intelligence industry

- CEO and Founder of Solver

- Author and speaker on BI subjects

Solver

- Founded in 1996

- 110 Employees and 220 reselling partners

- HQ in Los Angeles, 9 International Locations

- On Gartner CPM Magic Quadrant for 3rd year in the row in May, 2016

- 1,500 customers


Overall Vision

• Tying technology back to the Better Budgeting Approach™

How Solver supports each phase of the budget lifecycle (demo):

• Strategy

• Budget

• Operations© 2016 BroadPoint Technologies | Slide 42


Budget

Operate

Strategize

Align Your Strategies

and Budget1. Keep your eye on the goal

2. Get the right people

involved

3. Meet in the middle

4. Align your

technology to support

your strategy

Build Your

Operational Budget5. Choose the right tool for the job

6. Standardize & fortify the templates

7. Monitor workflow and approvals

8. Lock down your budget

Live with and

Love Your Budget9. Implement an

“early warning” system

10. Roll your forecast forward

11. Start planning early

12. Build one source of the truth

Contact BroadPoint for more information on available budgetingsolutions that may fit your needs or to schedule a demo of theSolver BI360 System.

John Herbstritt Cathy Fregelette

[email protected] [email protected](301) 634-2406 (301) 634-2414

[email protected]

(301) 634-2456


mailto:[email protected]

