Accounting can be challenging, but most finance teams struggle with some tasks in the planning cycle more than others. One of these is budget forecasting. Problems with data accuracy and the lack of accountability can make it difficult for any finance team to improve their budget forecasts and become more strategic in their financial planning.
However, there are several ways for organizations to fine-tune their budget forecasts. In this article, we’ll explore what budget forecasting software is and why businesses need it.
What Is Budget Forecasting?
Budget forecasting can be thought of as one process. Still, it relies on both budgeting and forecasting, often interchangeable terms, to work together to ensure effective business planning, no matter the size.
Budgeting is simply a detailed outline of your company’s projected financial performance per month, per quarter, or through the entire fiscal year. Budgeting provides stakeholders with a detailed view of the company’s financial position and other pertinent information such as their cash flow, revenue, expenses, that can be found in their financial reports. Budgeting also plays a crucial role in organizational management, giving top-level C-suites a better understanding of how the company handles its budget, spot any inefficiencies in cash flow, or identify trends that may continue to drive teams to overspend. With what the financial managers can gather from their budgeting reports, they can spot which assets are driving real value for the business while assessing, which are better off reallocated to other opportunities to derive more significant profit.
On the other hand, forecasting can be considered a more advanced type of budgeting that draws both short- and long-term projections for the company to deal with their expenses and other revenue. An example of this is a revenue forecast, which helps organizations plot the financial adjustments needed to develop or upskill their staff, develop products, or track inventory. Forecasting can be done from the top-down or bottom-up, giving finance teams an in-depth look at how the company can fare in meeting its budget goals.
Financial forecasting provides crucial data essential to effective business planning, helping companies mitigate risk and improve their operations for greater productivity and stability.
While budgeting helps companies track their financial goals, forecasting is the line drawn on the ground to ensure they can follow through in setting the budget to achieve their desired results. When used together, budget forecasting provides companies with an effective planning process that ensures companies have the means to achieve their goals and their bottom line.
Why Performance Canvas Financials Excels in Budget Forecasting
When you’re on the lookout for a budget forecasting software that fits your needs, there are few things you’ll need to keep in mind.
It would help if you had a budgeting and forecasting software that will give you the flexibility to achieve crucial tasks with efficiency and consistency. With so many businesses having to deal with changing market conditions daily, Performance Canvas Financials (PCF) ensures they can roll with these changes as they come while providing accurate information.
PCF offers self-service budgeting, planning, and forecasting and comes with reporting and consolidation on a single web platform.
Having the ability to handle reporting, budgeting, forecasting, and consolidation in one platform makes it easy for users to automate the entire finance process from start to finish. Companies will also be happy to note that Performance Canvas Financials is unique because it is designed and developed by accountants for other accountants. Simply put, this software was made with finance users in mind. There is no expectation of any advanced technical skill required to use this solution. Further, financial process automation is at the heart of what it does as a software.
When it comes to budget forecasting, automation and analytics have made Excel spreadsheet errors a thing of the past. Performance Canvas injects best practices in FP&A into the solution to ensure the process is not only automated; it is first intelligently streamlined.
Performance Canvas allows your finance team to view historical figures and compare them. Comparing budgets versus actuals and spotting trends on the horizon will become effortless activities for your team. You can also do variance analysis to help improve the way you do budget forecasting.
Performance Canvas financials is an excellent replacement for reporting, budgeting, forecasting, and consolidation manually done in Excel. An added benefit is that Performance Canvas integrates with most ERP systems and lines of business systems today, making the flow of information seamless across various organization systems.
Performance Canvas Financials comes in three product packages: Basic, Standard, and The Works — allowing finance teams to customize their software for budget forecasting according to what fits the needs of their growing business.
