Budgeting and Forcasting Process

By: Decimal  09-12-2011
Keywords: Cost Management, Budget Planning, Activity-based Management

In an effort to reduce overhead and promote harmonized and efficient strategic decision capabilities, many companies are asking the following questions:

  • Is your budget cycle too long?
  • Do you find it difficult to achieve synergy between the various departments?
  • Would you like to have the ability to collaborate on your budget anytime, anywhere?
  • Do you want to reduce your budgeting costs?
  • Does this process present a significant opportunity cost for your managers?
  • Would your managers’ time be better spent on more profitable tasks than lengthy budget preparation processes?
  • Do you want to improve the accuracy of your budgets?
  • Would activity-based management budget planning make your company more profitable?
  • Do you realize that integrating cost management into the budget planning process is a value-added reality that is well within your grasp?

The need for companies to make their budget preparation process simpler and more efficient is a widespread concern in business circles.

Rather than simply extrapolating from historical data, managers need to work together to produce a budget and forecasts that are in line with their company’s strategic and operational goals. Also, companies should be measuring their performance not with traditional, static budgets but rather with a dynamic budget: one that is based on volume or actual production drivers. This is equally true for the private as well as the public sector where, in many cases, several people are responsible for establishing effective performance measures.

The budget planning features of DECIMAL’s solution are an integral part of the Web architecture, enabling managers to use the full capability of our cost behaviour model in their budget planning process. Now, when there are changes in cost driver volume, managers can move beyond more data extrapolation to an actual analysis of cost behaviour. This analysis relies on reusing the production cost model and all the associated business rules; this provides managers with a head start in their budget preparation activities and a better understanding of how those business rules impact the production and overall costs of the organization.

Last but not least, the software’s tracking function significantly reduces budget preparation time, thus providing managers with previously unachievable synergy, an effective control environment and unprecedented iteration tracking.

Keywords: Activity-based Management, Budget Planning, Cost Management,

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