How to choose a budgeting system for a company?

Has your company budget exceeded previous financial assumptions more than once? When closing the project, do you see that its costs did not meet your expectations? In such situations, it is worth considering implementing a budgeting program. It will give you control over finances and allow you to improve operations. However, before you start buying such a system, it is worth finding out what to pay attention to when choosing it. Our specialist provides the answer.

In our article you will find out:

• Budgeting – what is it?
• Spreadsheet or budgeting system – what to choose?
• What to look for in a budgeting system?
• What does the budgeting system from our offer provide?

Budgeting – what is it?

Budgeting in the enterprise is a tool that supports the company in ​​designing, creating, approving, controlling and accounting for the budget. But not only! In conjunction with planning, budgeting is also part of the effective controlling activities.

For example, when you create financial plans for projects, you can immediately reserve and prioritize the human or material resources needed for the implementation and allocate them if necessary. You are also able to monitor the level of budget utilization and receive alerts in the event of a possible budget overrun, already at the ordering level. In this way, you have ongoing access to data that is important to you. You gain the ability to quickly react to unexpected situations.

To sum up, the purpose of budgeting is to effectively achieve the company’s goals, regardless of whether it functions as a form of controlling expenses in the company or as a method of supervising the course of projects carried out by it.

Spreadsheet or budgeting system – what to choose?

When you decide to implement budgeting in your company, it is worth considering a tool that supports you and your employees. The basic solution chosen by many companies (especially at the beginning of their activity) is a spreadsheet. Its main advantages include:

• universality in access
• ease of use
• low license cost

Unfortunately, spreadsheets usually work well for small businesses with no complicated financing processes. So if you run a larger company or supervise complex projects, it is worth choosing a dedicated budgeting system.

Its functionalities will provide you with comprehensive financial control, and allow you to detect inaccuracies in operation, bottlenecks and even accumulate savings. If after a completed project or periodic settlement suddenly turns out that the final amount has significantly exceeded your assumptions, it is a sight that you should implement a budgeting program.

What to look for in a budgeting system?

When choosing a budgeting program, pay attention primarily to the functionalities it offers.

First of all, check if the system allows you to control the assumed budget, i.e. it has alerts informing about the degree of its use. Thanks to it, you will always be up to date with data, which will allow you to react to possible exceedances and changes at an early stage, e.g. when placing an order.

Another aspect is quick and multidimensional analyzes and reports. Thanks to them, you can draw conclusions for the future, and thus plan the use of resources and identify cost centres. It applies to the employees working on the project and the materials used or issues such as electricity distribution or fuel consumption.

Also, pay attention to what forms of calculation a given system provides and whether it allows for the sub-budgets creation and various financial scenarios. These functions are necessary when creating more complex projects (e.g. construction projects), where you can down the work into different stages and budgets dedicated to them. In this way, you monitor the overall plan and the finances for specific issues (e.g. sewage or heating construction).

A good budgeting program also works with other systems, such as ERP or automatic reading of documents. Their integration allows you to work on one database, and thus the efficient flow of information. It is also reducing the work and limiting the potential errors. Integration ensures one-time data entry into the database and free flow between programs.

(Find out more about how you can improve remote work in the company)

What does the budgeting system from our offer provide?

The budgeting program from our offer is a comprehensive tool supporting our clients from various industries for years.

The system has been equipped with, among others in:

• automatic notifications about exceeding the budget or approaching the set limits
• the ability to settle in different currencies
• multidimensional analyzes and reports
• building deep financial structures in the form of sub-budgets
• cooperation with the automatic reading of documents module
• grant accesses and views to individual users
• integration with almost any business system and operation on a one database

With the program we offer, you can create various budgeting scenarios, assuming any variables that may appear during the work (e.g. changes in hourly rates or material prices). This way can easily calculate your budget and create a financial security threshold for your investment. It is a function when cost estimates for tenders, where the time to calculate the cost of the project and its implementation may be several or even several months. Such simulations allow you to create budgets with a financial reserve and secure the project.

The program also offers a mobile version, available for tablets and smartphones. It allows you to perform offline – online budgeting. It means that data can be entered into the system, even if it does not have a temporary Internet connection, and then automatically sent and updated in the database. It is an advantage that works in projects carried out in the field, where, after the end of the day’s work, the manager connects to the network by sending all information on the work performed.

The system also allows for convenient data modelling and the creation of divisors and analytical models. It means that, for example, you can break down any costs that arise not only into projects or sub-projects but also into individual resources. You can write out an electricity bill for both specific departments in the company and individual machines (knowing their energy consumption level). In this way, you can create very detailed simulations of the use of financial resources.

Written in cooperation with Piotr Bargiel, Senior Sales Specialist in Kotrak.

(Read what does comprehensive IT service for companies in Kotrak cover?)