Increasing the Value of the Budgeting Process

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bbcon 2013

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Increasing the Value of the Budgeting Process

  1. 1. 10/7/2013 #bbcon 1 Increasing the Value of the Budgeting Process
  2. 2. 10/7/2013 #bbcon 2 JENNY CHIU – VP FINANCE, LA YMCA KATE MELVIN – DIR OF ACCOUNTING/ASST CONTROLLER, INDIANA UNIVERSITY FOUNDATION BRIAN WALKER – POWERPLAN/ADVANCED BUDGET MANAGEMENT
  3. 3. 10/7/2013 #bbcon 3 TWEET ABOUT YOUR SESSION #BBCON #FETRACK # BDGFUN @KT8IRD
  4. 4. 10/7/2013 #bbcon 4 • Joined YMCA of Metropolitan Los Angeles in January 2012 as Vice President of Finance • Prior to joining the Y, over 12+ years of finance, accounting, operations and management experience working in “for- profit” sectors • Graduated with B.S.E with concentration in Finance and Accounting from the Wharton School, University of Pennsylvania GETTING TO KNOW YOUR PRESENTER, JENNY CHIU. . .
  5. 5. 10/7/2013 #bbcon 5 • OUR CAUSE - The YMCA of Metropolitan Los Angeles is a volunteer-led non-profit organization dedicated to strengthening communities through programs that promote youth development, healthy living and social responsibility. • OUR WIDE REACH - The YMCA of Los Angeles has been making a positive impact in our communities for over 130 years. Our 25 branches stretch across over 100 miles of Los Angeles County, from Antelope Valley to San Pedro. Our membership community is 264,500 strong. Membership is open to all, with financial assistance available to those who cannot afford it. This year, the LA Y helped 1 out of 3 member families with financial assistance. - We cannot do our work alone, extending our work with over 200 community partners across the county, including schools, hospitals, clinics, cities and other civic organizations. YMCA OF METROPOLITAN LOS ANGELES
  6. 6. 10/7/2013 #bbcon 6 BACKGROUND AND OVERVIEW: WHO ARE WE & WHERE WE WERE
  7. 7. 10/7/2013 #bbcon 7 • Association - Non-profit organization in operation for over 130 years with annual operating budget of $75 million - 25 branches with a corporate support office - Approximately 3,000 employees and 5,600 volunteers - Historic culture of independent silo operations • Accounting System - Oracle based system for past 10 years until 2013 - General Ledger is now Financial Edge launched January 2013 - Budgeting Software is now Advanced Budget Management (Powerplan) launched October 2012 (for budgeting 2013) BACKGROUND
  8. 8. 10/7/2013 #bbcon 8 BUDGET PROCESS Association Budget Summary: Branch Summary: Departments Specific Program Service Research and Planning • Bottom up (program level) budget approach which rolls into Association - Oracle budget module: input monthly budget figures for revenue and expense accounts on program level • 25 branches each operating over 50 different programs (1,250 programs) • Over 300 staff with fiscal management responsibilities
  9. 9. 10/7/2013 #bbcon 9 300+ staff and 1,250+ programs: • System limitation and lack of standardization - All detailed budget work done outside of system on different spreadsheets using different methodologies • Time consuming - Lots of preparation work required to gather historical and researching historical information to build budgets Association view: • Association review process was challenging to fully understand all the nuances of budget aside from comparison of figures to prior years • Difficult to compare branch budgets across program areas BUDGET CHALLENGES
  10. 10. 10/7/2013 #bbcon 10 YEAR 2012 (YEAR OF CHANGE): WHERE WE WANTED TO GO & WHAT WE DID
  11. 11. 10/7/2013 #bbcon 11 • Operate as one Y - Leverage knowledge and resources across Association to come up with best practices for standardization - Increase trust and transparency • Empower and strengthen staff (program directors) in their fiscal management skillset and help them connect their budget with our cause • Increase overview as an Association to identify bright spots and opportunities to better serve our communities OUR GOALS
  12. 12. 10/7/2013 #bbcon 12 • Standardized “driver-based” revenue budget methodology for each major program area to be utilized across Association - Membership - Childcare - Other Programs - Financial Development • Collaborative implementation - Project managed by Accounting dept with mindset of avoiding TOP DOWN approach - Involvement of key staff from various branches in “driver-based” budget template development - Involvement of TRAINING and IT depts ROLLING OUT NEW APPROACH (NEW SYSTEM)
  13. 13. 10/7/2013 #bbcon 13 Membership: • Group consisting of select branch Membership Directors along with Accounting, Training and IT BUDGET TEMPLATE DEVELOPMENT 1. Compiled and discussed various budget models used across Association 2. Consensus on proposal of standardized model 3. IT supported in extracting data where needed 4. Accounting created excel template of model 5. Membership Directors tested and provided feedback 6. Repeated steps 3-5 until satisfied 7. Training material created and trainings led by staff
  14. 14. 10/7/2013 #bbcon 14 BUDGET TEMPLATE DEVELOPMENT
  15. 15. 10/7/2013 #bbcon 15 Outcomes: • Developed robust driver-based membership model using drivers that speak to staff (Ex: Enrollments, Cancellations, Total Units) and also provides easy access to historical information • Time intensive process but ultimately through this collaborative approach, able to get buy-in and support of all Membership Directors in using these drivers since it was developed by fellow peers who understood their perspective • Excel “driver-based” template - Requires more complicated formulas - Need to thoroughly test all formulas for accuracy - Need to protect cells where formulas exist - If updates made, difficult to ensure all staff are using the correct template version - Challenge for higher level overview / aggregation BUDGET TEMPLATE DEVELOPMENT
  16. 16. 10/7/2013 #bbcon 16 ADVANCED BUDGET MANAGEMENT (ABM)
  17. 17. 10/7/2013 #bbcon 17 ADVANCED BUDGET MANAGEMENT (ABM)
  18. 18. 10/7/2013 #bbcon 18 YEAR 2013: WHERE WE ARE NOW
  19. 19. 10/7/2013 #bbcon 19 Training & Development: • Webinar trainings throughout the year based on relevancy - Jan - Mar: Variance reporting – how to view performance and research & document variances compared to budget and prior year - Apr - Jun: Forecasting reiterating purpose and “driver-based” methodology - Aug - Sep: Budgeting reiterating purpose and “driver-based” methodology Feedback & Improvements: • Refined reports to be more effective for branch use or association use • Identified areas that need further training and clarification for new year Top Management Support: • Supportive of changes in reports and new processes JANUARY – SEPTEMBER 2013
  20. 20. 10/7/2013 #bbcon 20 Outcomes: • Budget process - Good foundation of standardized “driver-based” budget methodology in creating more detailed, well thought out budgets by staff - More efficient and transparent budget process and reporting with new system ABM that provides easy access to information and aggregates automatically • Association overview - All branches and corporate office speak same budget language and use same tools - Can better compare branches via reports with detail level to identify bright spots and opportunities, ex. Membership Trends • Culture - Shift towards increased teamwork and open collaboration. Approach in implementation which involved branch and corporate staff set example of possibilities when we work together. JANUARY – SEPTEMBER 2013
  21. 21. 10/7/2013 #bbcon 21 Increasing the Value of the Budgeting Process PRESENTED BY CATHERINE “KATE” MELVIN
  22. 22. 10/7/2013 #bbcon 22 • Indiana University Foundation • Director of Accounting/Assistant Controller • Bloomington, Indiana • Working Budget since 1999 • Personnel & Program Budget Focus • Annual Operating Budget of $27 Million • Approximately 200 Employees • General Ledger – Financial Edge (Blackbaud) • Budgeting Software – Advanced Budget Management (PowerPlan) GETTING TO KNOW YOUR PRESENTER, CATHERINE “KATE” MELVIN . . .
  23. 23. 10/7/2013 #bbcon 23 EVOLUTION OF THE BUDGET PROCESS Upgrading Technology Changing Approach Moving Forward
  24. 24. 10/7/2013 #bbcon 24 TECHNICAL SOLUTION ROUND 1 – “GEE, I MISS THOSE SPREADSHEETS”
  25. 25. 10/7/2013 #bbcon 25 UPDATING TECHNOLOGY Manual Budget Build Top down process Changes added globally Months of budget work Challenges Budget was manually compiled Analysis across organization Reports – not useful or timely
  26. 26. 10/7/2013 #bbcon 26 Solution – Budget Development Tool Online access for managers Personnel budgeting Access to updated, actual results Value Added Process ownership Updated results across organization Tools to manage funds more effectively UPDATING TECHNOLOGY
  27. 27. 10/7/2013 #bbcon 27 CHANGING OUR APPROACH ROUND 2 – “YOU WANT US TO DO WHAT?”
  28. 28. 10/7/2013 #bbcon 28 CHANGING APPROACH Budget Preparation Forecast of actual expenditures Build budget for next fiscal year Accounting consultations Assessment Templates completed for management review New requests and budget cuts Conferences with senior management
  29. 29. 10/7/2013 #bbcon 29 Challenges Compressed timeline New levels of scrutiny Confidence in the process Impact Strategic decision making Information exchange Improved reporting and analysis CHANGING APPROACH
  30. 30. 10/7/2013 #bbcon 30 MOVING FORWARD
  31. 31. 10/7/2013 #bbcon 31 What’s Next? FY2015 changes Process updates Rolling forecasts/Zero based budget? Take Me Home Education Engagement Energy MOVING FORWARD
  32. 32. 10/7/2013 #bbcon 32 THANK YOU FOR YOUR INTEREST! HAVE A GREAT DAY!! Education Engagement Energy

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