My Department Plan -- Official Blog
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You update things constantly in your company right? Excel was created in the 1990’s. Unless your company is stuck in the 90’s, using dial-up and talking about the newest Friends episode around the water cooler, you need a new budgeting software. Excel is old and outdated. It is not made to handle huge amounts of data and analyze them into an easy report for you. Excel may have been trustworthy back then, but it is not capable of meeting today’s high demands of financial tracking. Your company has grown in the past couple of decades, and so has budgeting softwares' abilities. If you put some money into how your company handles its money, you won’t be disappointed. It is time to ditch Excel and breathe some new life into your budgeting system.
What Excel Doesn’t Do
A corporation is too complicated for a simple standard spreadsheet. The standard spreadsheet is one dimensional. It spits out numbers for you to decipher. If someone has an off day and accidentally types in a wrong number, your whole budget can go haywire. Then your accountants are wasting valuable time trying to find the rogue number. Excel needs to be swapped because it doesn’t provide all of the financial tools that are needed for a successful business. Everything in the office needs to be sharable, however it is hard to in Excel spreadsheets, or even in Google documents. This makes it hard for departments to collaborate together and compare budgets, projects, and finances. Excel may be good for gathering information, but it has no budgeting tools at all. Therefore, it is time to give up the simple cell structures and have a budget that allows for customization and detail.
Why You Should Swap
Your company is flexible, so your budget should be too. What your company really needs is a budgeting system that can cater to all of your different departments or sections of your business. This allows for better organization that will show you where each penny is going. Manufacturing, retail, distribution, service, or nonprofit all have different purchasing tracking needs. Budgeting software can be customized to meet your company’s needs. It fits you, rather than you trying to squeeze into it. Unlike Excel, these softwares offer more control and detail like tracking daily department activities. You will be able to track every purchase and shipping order along with a big picture report of where your budget stands. Budgeting systems can even sync all of your data to the web for one central and safe place to access everything. Excel doesn’t even come close to doing that. So, swapping from Excel to an actual budgeting program will give your company more organization, customization, and accurate results.
Don't rely solely on Excel
Give your company a budget software that can handle everything and make things easier for everyone, not just a tool that can gather and somewhat analyze data. We are talking money here, not data! Excel was created more than twenty years ago and it was not created for an immense amount of information. Budgeting software is made for handling every aspect of a company’s finances and it isn’t that expensive. The Friends television series eventually had to end, and so does your old budgeting system. So use Excel as a resource, but not as your primary budgeting tool.
It is that time of year again, it is time to create a new budget for your department. 49% of Americans don’t keep their new year resolutions. Hopefully this isn’t the case with your company’s budget. Preparing a budget for a new year helps to plan your your department’s income and dispersion of resources. Staying within your planned budget will help your company achieve its goals, measure results, and draw attention to problem areas. To ensure your budget will be a successful resolution, here are 5 helpful tips when planning your department’s budget.
1. Understand and review the budgeting process.
Just because you create this budget year after year, you shouldn’t just go through the same motions time and time again. Think of this as an opportunity to see growth and make goals for more prosperity and new ideas. Before diving into the sea of information, it is important to understand the budgeting process and review the steps of how to make an accurate budget. That includes being able to understand financial statements and cash flow. So practice your skills and look at your past budgets to observe the on-going process. You should also discuss with other departments about their budgets. This way you can be aware of any changes or new things that could have an affect on your department. Also ask yourself about how hard or easy the budget was to achieve from last year. Most importantly, set aside ample amount of time to complete your budget and discuss any issues with the chief financial officer.
2. Gather the numbers
When it comes to collect data for your budget, it is key to cast a wide net. You do not want to miss any information. Department budgets consist of a lot of small items. Make sure to include the staff costs like salaries, benefits, and all of the different types of tax liabilities. Then consider your department’s equipment costs. For instance, electricity, water, new technology and cleaning supplies. Another crucial part of a department budget is inventory and office supplies. Lastly, don’t forget to give some space for unexpected expenses because they will happen.
3. Make Sense of it all
Now that you have all the data it is time to plan out your budget. An organized budget is a successful budget. Try to categorize your figures so they will be easy to update and access throughout the year. For example, when managing your inventory, try to separate your figures into real costs (average amount of inventory), space costs (cost per square foot), and management costs (needed equipment and staff). Once you have input all of the information, try to look at the big picture and make adjustments. Did certain things change if your sales were lower than expected? Try to shave off some expenses. If you had a great year, try to invest in some new technologies or more staff.
4. Predict Wisely
Predicting your department’s budget accurately will help your organization forecast the upcoming year. So, having a feasible budget is key. If you try to create a very strict budget, it may look great to your boss, but it will stress you out for the whole year. If you create a very loose budget, it will defeat the purpose and your department won’t achieve any real goals. Staying true to actual costs and averages will stabilize your predictions.
5. Implement it
Like completing any resolution, you cannot just say you will do it, you must put the plan into action. You can achieve this by keeping the budget in a central place so it can be a constant reminder to keep it updated. The more you monitor and report finances, the better chance you have of staying in your budget. Another wise idea is to hold monthly review meetings so that everyone in the department is aware of the financial goals. Your budget only works if people respect it. By creating a successful budget, your department will eliminate fraud, discipline spending, and benefit the entire organization for 2014.
Picture Credit: http://creditunionsofmissouri.com/seven-steps-to-a-budget-made-easy/
Budgets are vital to your business. Even though they are tiresome, budgets are the deciding factors for pretty much everything in your business from costs, profits, to making future predictions. Budgets show your progress from month to month, and year to year. The more accurate the budget, the more you will be able to achieve it. So here are five more tips to keep in mind when you look at your budget.
1. Expect and adjust to changes.
There are millions of unexpected things that can happen to your business and its budget. Therefore, you should leave some slack in your budgeting so changes won’t be so detrimental. If something unfortunate does happen, like you lose a client, your budget can help you predict how much you income you will lose and how much it will cost you to get a new client. That can be very helpful information in a crucial time. Or if we want to think of a positive scenario, like getting a lot of business from a new client, your budget can help you put the new funds to good use. Including room in your budget for unexpected scenarios will help your business adjust to anything.
2. Never be afraid to look for new suppliers or services.
Competition exists in business for a reason. If you want to get the best price, research other options around every budget review. This ensures you aren’t getting overcharged too. It is courteous to talk to your current service provider, and see if they are willing to match the competitors price. If they don’t want to, then go ahead and take the cheaper option. Just make sure they are of the same quality.
3. Cut costs when necessary.
Sometimes you have unexpected costs or opportunities that arise and you need to dip into your budget a bit deeper than intended. If your budget is getting a little too tight for your comfort, consider cutting some costs. This doesn’t have to result in cutting wages or laying people off. Just think about the items and things you can control, like waiting to purchase things for a bit. If you think of clever ways to save some money, you could really help out your department, and get on your boss’s good side.
4. Use incentives.
Incentives work. If you include some room for bonuses in your budget, your staff will become more engaged in creating an accurate budget and sticking to it. This doesn’t have to be a huge check, even a simple dinner out could do the trick. Involving your staff in the budget so they are fully aware of where it can and cannot stretch is very valuable. Staff can come up with new ways to save money that you might not have even thought of. So make the budget a team event and you will all win in the end.
5. Update and review monthly.
Your budget will change often so it needs to stay current. Updating every month will keep your budget accurate, keep you and your staff aware of budget goals, and allow everyone to adapt. This way you won’t spend money you don’t have, and you will know when you have extra money to splurge. While you are updating your budget, look back on the past months and try to observe patterns and trends of expenses and income. This will give you a leg up on what is to be expected in the upcoming months.
Budgets are a fantastic way to manage your business’s finances if they are done right. If you put in the hard work and time, your budget and your company will benefit greatly. So add these five tips to your tool belt and your budget will be better than ever before.
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As your company starts setting goals for this year, think about your business’ financial system. If you want to improve this area and increase team productivity, consider department resource planning. Departments are the building blocks of large companies. Department resource planning (DRP) is a flexible type of budgeting that fits the functions of the department. This can be a useful way to achieve more flexibility, freedom, and cooperation.
The Need for Department Resource Planning
You shouldn’t try to fit your business into a fixed software. Most departments are forced to use corporate based softwares that involve enterprise resource planning (ERP) for their financial transactions. These transactions do not apply to the smaller aspects in a department. What departments really require is a system that can handle their day-to-day processes. Using ERP for corporate finances and management combined with DRP is a huge advantage for your business.
The DRP Advantage
DRP allows you to get valuable data such as the daily processes of departments. It offers:
· Allows your budget to have a hierarchical design for your departments
· Budget effortlessly adapts to change
· Enables you to have highly complex data
· Budget plan will fit your department’s specific needs/projects/resources
· Compatible with existing ERP software
· More options than a simple ERP for budget planning
· Have your own ‘cloud’ to instantly sync all of your data to the web and allow collaboration
· No more spreadsheet circulation because Excel can be imported/exported
· Monitor your separate departments and your entire business’ assets all in one easy central place.
· Increases teamwork and productivity
· Commitments, daily budgets, and purchase order tracking made easy by planning and executing
This crucial plan also reports day-to-day activities of each department. It also fulfills the purpose of any financial software by reporting your current financial status and predicting where your finances will be in the future.
What DRP Looks Like in the Office
Each industry has different business needs. So how is it possible to accommodate all types? By observing industry trends it is obvious that purchase order tracking is one of the most valuable data for any industry. For example, in retail it is vital to have actual time financial tracking of purchases for you inventory. Profit/cost center managers, project managers, budget administrators, operational managers, and vendor managers are just a few roles that DRP helps. It allows for the budget supervisor to oversee the software while team members can be in charge of purchase orders and projects.
Make the Switch
DRP provides superior financial cohesion. It addresses the separate needs of the departments while unifying the company under one simple but effective system. There will be no more incompatible documents and staff will have clear knowledge and easy access to the system. Your business will also gain useful information from the real time tracking of purchases and daily activities. This fluidity between the departments will increase efficiency and bring everyone in the workplace together. For a successful 2014, think about department resource planning for your business.
Having the proper roles in your collaborative tools is crucial. It defines who can view and use certain portions of the software. You need to have defined, proper roles in your department planning software or else disorganization can easily creep up. Without roles it can be a free for all, so choose your DRP software accordingly. Naturally, a good way to break it down would be to show a good example. Here is how it is broken down at MyDeptPlan.
“Plan, track, report": three verbs that sum up the main job of a department finance manager. Any successful budgeting project has to involve these three steps. Without one, the budget will fail. The only solution to managing daily financial data accurately is to have tools that allow you to plan, track, and report well.
Most corporate professionals who deal with financials on a daily basis have outgrown spreadsheets, realizing that you need more than just Excel spreadsheets for business budgeting. With the plethora of software options for budgeting in 2013, many corporations are ready to leave behind inadequate, overly simplistic tracking models and use the great tools on the market that allow for web collaboration, real-time updates, and drastically improved accuracy.
Microsoft Excel, as countless professionals continue to admit, was one of the business world’s greatest inventions. As a new and innovative tool, it gave people the ability to easily compile lists of data that they could share with others. Spreadsheets will always be an effective tool for gathering and analyzing information.