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.

From a management perspective, you often don’t see the originally submitted amounts and want to have the visibility into seeing what was actually submitted and the changes processed along the way.

Most of the changes are necessary; those responsible for multiple units need to work within their budget and often need to adjust based on corporate goals. This is true at each common parent level, where additional movement and adjustments are made.

Some of the changes are made as part of the ‘budget game’. You know what you submit will get cut, so you overestimate to try and get something close to what you wanted to begin with. Without visibility into what was changed or why, the game perpetuates.

 


Breaking the cycle

Working with one of our clients, we came up with a solution to help them manage this process.  We created a report to show all the changes that were made from the originally submitted amounts through to the final budget. This report takes away the ‘mystery’ around the budget cycle and opens up important dialog before the end of the process, increasing awareness and transparency.



Tagetik budget cycle


The above shows an example of such report (numbers have been changed to protect the innocent), where an organization has local offices rolling up to regions which in turn roll up to a country.  With this report everyone involved from original submitter to  management sees how each level has changed the budget from what was originally submitted by the local office.  
 
This report was done pretty easily by combining two common Tagetik features. One is Breakback which allows you to change data at a parent level and automatically spread the changes to the lowest level node in the dimension. The other feature is the ability for the system to automatically capture the changes made in a dimension called category.

The result of this report for our client was more accurate budgets and visibility throughout the process, resulting in greater buy-in at all levels.    

What are your thoughts? What are you doing that has helped the budget process in your organization?

 

Tagetik unified budgeting, planning and forecasting

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