Budgeting Add-Ons Create Efficiency and Ease

Today’s more robust Accounting and ERP Systems typically have budgeting functionality built into the platform.  For many complex organizations, however, they may still not quite meet your current budgeting and reporting requirements.

How do you know you need a budgeting add-on?

While most systems will allow for the import of a completed budget and allow for reporting on budget to actuals, there are some important functions that are not universal.  If you are looking for any of the following items (or combination thereof), you may need to look for an add-on to your system to give you the full functionality needed:

• Budget collaboration and approval workflow. Many organizations generate templates from past financials to start the next year’s budget, and then request input from department or program managers for their responsible areas. Budgeting add-ons allow for this collaboration while avoiding manual and duplicate efforts.
• Budget complexity. Some ERP platforms do not allow for budgeting down to the program/grant/department dimension level.  In cases where an organization level budget is needed, budgeting add-ons allow users to achieve the granularity needed.
• Budget roll-up. Many systems do not allow for budgeting by line-item details that roll up to the general ledger account budgets.  Since budgets are often created by thinking through the account activity, it is helpful to have your system/add-on compile everything.
• Budget resources. Staff resources are monitored and budgeted very closely (especially in the nonprofit sector).  Each grant or project needs a certain FTE allocated to ensure that staff levels are fully utilized and able to complete grants as they are committed. Very few systems on the market allow for budgeting by the specific staff or staff level. This functionality can be very helpful to form a complete, detailed picture.  Budgeting add-ons help organizations achieve this level of detail.
• Budget iterations. As months pass, it is helpful to reevaluate the budget, use it as a basis for forecasting, or experiment with ‘what-if’ scenarios.  Budgeting add-ons allow users to store and compare multiple budgets for reference as needed.

How do you select which budget add-on is right for you?

Many factors go in to choosing the right add-on to make your budgeting process most productive.  We outline three key considerations below:

• Current accounting system. Not all systems and budgeting add-ons integrate well. AAFCPAs advises clients to first ensure the add-on you are evaluating has successful integrations with your accounting system.
• Expectation gap. Budgeting add-ons vary in functionality. Ensure the application you are evaluating can do the things you need it to do. Start by gaining input from all stakeholders and documenting your add-on requirements. Then ask for demos and verify functionality.
• Applications vary by price. Some are priced per user, and others charge a flat price for the full application. If it is user-based pricing, ensure you are comfortable with the current investment and consider your short and long-term needs for scalability.

AAFCPAs encourages clients to approach each and every System Selection in a strategic and organized way. The most frequent issues we see with clients’ abilities to achieve efficiency, effectiveness, and internal control are systems limitations, systems not used to their fullest potential, and investments in systems that are misaligned with operational goals.

AAFCPAs pragmatically answers the questions: What do I need most? How can I make sure I utilize its fullest potential?  We review your current processes, identify process gaps, and research solutions based on your specific requirements.

If your organization is considering implementing a new system, or has already started on the implementation journey, and would like to discuss your approach, please contact Robyn Leet, Director, Business Process Assessments & Attestations, at 774.512.4010, rleet@aafcpa.com, or your AAFCPAs Partner. AAFCPAs’ Business Process & IT Consulting practice advises clients on implementing pragmatic changes that have immediate impact.