What is the Starting Point for Your Budget?

Prophix Symbol 1 Col Spot 185 01Prophix Oct 5, 2018, 7:23:00 AM
The reality of running a business is often much messier than the textbook ideals we carry in our heads. The theory is of neat org. charts, regular cycles, and smooth flows of information driving strategic decisions. In practice, we find processes that are constantly disrupted, and improvisation is a constant theme. We battle our way forward. Nonetheless, we know the ideals and we strive to make the business a bit more like them, knowing that if we could, life might be a little less stressful, workloads more predictable, and the business more productive. One of the greatest gaps between the ideal and reality that we’ve found is in the budgeting process. While the theory says that the budget should be mapped against the corporate strategy, shaping and supporting investment in order to ensure its delivery, this is not often the case. The Future of Finance Audit helps finance professionals to understand their organisation’s maturity when developing a future-ready finance function and provides personalised advice about what to do next. It also gives us useful information that we can share anonymously with the finance community about the state of maturity across the board. If you haven’t taken the audit yet, you can find it here. From the audit we know that budget and strategy are rarely aligned, if at all, in a large number of organisations. Instead of being based on the latest strategy, the new budget is based on the old one, with edits wrangled through debates with the different functions about what is possible and desirable. Changing this is critical for building a future-ready finance function, and more importantly, for securing the longevity of the organisation. Unless budget and strategy are aligned, it’s hard to execute on that strategy effectively. So, how do you make the change? This is the subject of our new paper, which you can download here.
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Ambitious finance leaders use Prophix to drive progress. By improving the speed and accuracy of decision making, Prophix’s Financial Performance Platform elevates the talents of finance teams to do their best work. Crush complexity, reduce uncertainty, and illuminate insights with access to best-in-class AI insights and planning, budgeting, forecasting, reporting, and consolidation functionalities. Prophix is a private company, backed by Hg Capital, a leading investor in software and services businesses. More than 2,500 active customers across the globe rely on Prophix to achieve organizational success.

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