10 ways that Compas improves the budgeting process
Many small and medium-sized businesses have sophisticated IT systems to help run the business, but still rely almost exclusively on the simple spreadsheet when building the budget. Even organisations with sales in the tens or hundreds of millions of pounds have no specialist planning software, but rely on a generic tool that that is two-dimensional in nature, not integrated into other systems and frequently depends heavily one person to maintain and update it. For such businesses, Compas can significantly streamline the budgeting process, saving time and reducing business risk.
For many of these businesses, a switch to a specialised budgeting tool like Compas is not something that will happen overnight. However, despite that, Compas can significantly improve the process, making it faster, more enjoyable and more flexible, whilst providing outputs that can directly be loaded into Excel to support the final budget spreadsheet. However, benefits are not limited to the process of building the initial budget. Compas supports the Finance function throughout the year, making it almost trivially easy to create financial reforecasts, comprising a blend of actuals and planned figures, and providing a simple mechanism to report actuals against plan.
Listed below are 10 of the most significant ways in which Compas supports and improves the budgeting process:
- Natural, intuitive planning: Compas supports your way of planning. Plan the activities that matter to your business, at the level of detail that works for you. Plan some products and customers individually, and others as a group – or choose not to plan at that level at all. Defining a business stream takes seconds, and Compas performs all the hard work of calculating weekly sales and P&L.
- Instant aggregation: Whatever level you decide to plan at, Compas supports all the detail you need and aggregates instantly on the fly. This allows top-level reporting which can be drilled right down to the bottom level if needed. Far more detail can be supported than in a spreadsheet, making it easier to compare with actuals in due course.
- Iterative approach: Compas supports the creation of multiple draft budgets, before one is nominated as the final version and saved permanently. Because each draft contains the full detail of what it comprises, the drafts can be compared side by side to see high-level differences and drilled down to see exactly what has changed.
- Calculations are built into the system: Unlike in Excel, where calculations must be copied from cell to cell, in Compas the calculation is defined at the level of the object (e.g. shipping cost might be defined as number of packages x average shipping cost per package). This means that the calculation is guaranteed to be correct wherever a number is used, and provides a single place to update the calculation if it needs to change. In a spreadsheet, formulae are easily overtyped, and changing a calculation means updating it in every cell it is used, which is time-consuming and error-prone.
- The business plan feeds the budget: Because the budget is directly driven from the business plan, it is instantly possible to see the underlying cause if sales targets are missed (or exceeded). Contrast this with the situation where Finance build the financial budget at arm’s length from the rest of the business, making it much harder to reconcile differences.
- Historical data where it’s needed: The system used for budgeting also contains several years of actuals data, providing all the historical context and analytical tools necessary to build accurate forecasts. This saves time and improves accuracy, delivering tangible benefits which only increase over time.
- Supports a stand-alone budget workspace: Building the business plan which feeds the budget can either be done in the ‘live’ system (where it is subject to regular updates of actuals data) or can be done in a frozen budget workspace that does not get regularly updated and therefore provides a fixed environment in which to plan.
- Automatic loading of actuals data: In contrast to the Excel-based approach, where actuals and budget are stored in different systems, Compas receives direct feeds from company systems, allowing seamless reporting of actuals against budget, without any need to copy data from one environment to another. If required, the actuals data can automatically update future forecasts, or Compas can suggest updates that a human operator can choose whether or not to accept.
- One-click budget restatements: Once the financial year starts, Compas calculates a blended forecast, comprising actuals for the year to date plus planned figures for the year to go. This means that creating a budget restatement is a simple question of ensuring that the business plan is up to date, and clicking a button to capture the current plan and all its financial implications. As with the original budget, the restatement will save all the inputs and calculated figures, allowing comparison from the highest level down to the bottom.
- Export to Excel: The data in the system can be exported to Excel at summary or detail level, meaning that Compas can still support a budgeting process that is ultimately stored in Excel, allowing businesses to benefit from the detail, functionality and robustness of Compas without having to change their process entirely.
If you would like to see this working for your business, please contact us now for a no-obligation trial.