This document outlines 7 steps to create a better budgeting process: 1) Default the monthly spread to last year's actual pattern to avoid inaccurate spreading. 2) Automate a checklist to prevent line items from being forgotten. 3) Automate standard calculations to avoid errors from manual formulas. 4) Create an approval workflow with electronic signatures to ensure review. 5) Automate the headcount budgeting process to reduce miscommunication. 6) Allow "baselining" and "earmarking" to increase budget transparency and prevent errors. 7) Shorten the overall budget cycle for faster planning.

1. 7 Steps
to a Better Budget
Lawrence Serven
President
XLerant, Inc.

2. Desired Outcomes
• Faster process
• Fewer mistakes & rework
• More buy-in from the organization

3. Step 1: Default spreading to last
years’ actual pattern
• Divide by 12 Syndrome
• Explaining YTD “Timing Variances”
• Base monthly spread on seasonality
• Make it the easy default choice

4. Step 1: Default spreading to last
years’ actual pattern

5. Step 2: Head off
“I forgot to budget”
• Managers “forget” to budget line items
• Mad scramble to get those missing dollars included
somewhere
• Check box for each line item
• Budget not marked “complete” until
boxes are checked

6. Step 2: Head off
“I forgot to budget”

7. Step 3: Automate
standard calculations
• Miskeyed formulas
• New rows or columns break formulas
• Not all users Excel experts
• Have the system do the calculation
based on user choice

8. Step 3: Automate
standard calculations

9. Step 3: Automate
standard calculations

10. Step 4: Create an approval flow
before it reaches you
• That’s not my number
• Minimal operational review of budgets before being sent
to Finance
• Finance department left holding the bag
• Built in approval workflow
• Electronic “fingerprints”

11. Step 4: Create an approval flow
before it reaches you

12. Step 5: Automate your
headcount interview process
• Complex process
• Typically 60%+ of all expenses
• Miscommunication, misinterpretation, misunderstandings
• Automate your interview process and
have the system perform the work

13. Step 5: Automate your
headcount interview process

14. Step 6: “Baseline & Earmark”
• Hard to see how the dollars are really budgeted
• Just comparing “G/L Account 43-5640” budget versus
prior year doesn’t tell you much, but…
• …There’s a risk of user error by doing more than
plugging in a number into a G/L account field
• Create baseline budget
• Make it easy to add line item detail, layer on
a project, add comments – and make it easy
to report on that level of detail

15. Step 6: “Baseline & Earmark”

16. Step 6: “Baseline & Earmark”

17. Step 6: “Baseline & Earmark”

18. Step 7: Shorten the budget cycle

19. For more information
info@XLerant.com
203/328-3787