Top Ten Tips for Automating Financial Forecasting and Budgeting

Top Ten Tips for Automating Financial Forecasting and Budgeting

Manufacturers need more insight into the future financial health of their companies, and the latest breed of automation technology can help.

One of the secrets to the U.S. manufacturing renaissance is the adoption of automation throughout the industry, whether it be industrial robots on the shop floor or warehouse management software in the warehouse. One area that manufacturers are still struggling with, though, according to Alan Hart, Centage Corp., is financial budgeting, forecasting and analysis.

Today there are many budgeting, forecasting and business intelligence solutions available to manufacturing companies. But in order to be successful, no matter what solution is implemented, it must be practical to set up and use and most importantly, it must encourage users to embrace the process and welcome it; in other words, encourage people to use it because they “want to” and not because they “have to.” In many cases, this will make the difference between a successful and failed implementation.

Writing for Business Finance, Hart offers the following Top 10 list of the most important features and benefits of a budgeting, forecasting and business intelligence application:

1. Must be delivered as a database application for better control and management.

2. Should have a system-generated integrated set of forecasted financial statements.

3. Must have a modular approach with a complete array of functions such as: revenue forecasting module with cost; operating expense module; personnel module; fixed assets module; loans and other debt module.

4. Driver-based forecasting, which is the ability to work with unlimited and varied types of drivers.

5. Ability to allocate forecasted amounts to pre-defined accounts.

6. Business intelligence and rules must be built-in and available to users to choose from.

7. The application chosen must allow users to set up a chart of accounts representing the actual accounting system’s chart of accounts (or mirroring it).

8. There should be either a direct link or simple interface to the accounting or ERP software’s general ledger, where actual data can easily be populated in the budgeting software and immediately used in the analysis process, following the accounting period close.

9. Reports—both visual and alpha numeric—must be readily available and with minimal effort.

10. The budgeting, forecasting and business intelligence software application needs to act as an extension of the accounting software or ERP system’s actual financial data.

Read more about the technology tipping point at Business Finance.

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