We pour a massive amount of time and energy into our budgets once a year. We have realised that by involving our cost centre managers, our line managers, and our people in the field in drawing up the budget, they are engaged and empowered and more likely to buy into the budget and its results.
But what then? If it’s a once-off exercise that doesn’t tie back into anything of value, it may have the opposite effect on your team; with the recognition and empowerment they felt being reduced each month until they feel that their contributions were not only unappreciated, but a waste of valuable time.
The benefits of capturing a budget or forecast in an efficient way are established and many; however the real value of budgeting is only realised once the actual spend is compared against the budget or forecast. Although you could give your people access to the General Ledger, there wouldn’t be much point; non-financial users would not be able to understand the endless reams of irrelevant-to-them information.
Your team needs a real-time tool; a two-way interface between the budget and general ledger to allow them to keep track of their numbers and to provide feedback on any changes as they come about. Your managers need the ability to capture comments with explanations and reasons for any variances or discrepancies – even an adverse expenditure is not a fundamental problem if there is comment or documentation to support it.
The best way to fully empower your managers and get the most from your budget is to provide your team with a familiar environment; a purpose built budgeting and reporting tool that not only allows them to have input into the budget, but allows them to easily understand, track and monitor their expenditure against their budget. Without this, the value of the exercise is greatly diminished, and potentially damaging to your team and their morale.