For years, budgeting usually followed a standard pattern: review last year’s budget, compare that to performance, look at projections, and adjust accordingly. However, things have changed in the past few years. Budgeting in this new economy requires flexibility and “staying on your feet” at all times, so it can be really helpful to use an adaptive, simple, and Cloud-based budgeting system for your organization.
Let’s explore 5 tips for budgeting and forecasting in this new economy:
1. Look at “What-If” scenarios
It sometimes feels silly to make long-term plans, especially with how the last few years have been. Though your organization’s plans may change, it’s still essential to create a budget and stick to your goals. Forecasting and creating “What-If” scenarios can really help you prepare for anything that could come your way and help you adjust accordingly. Make contingency plans, set aside a reserve, and prepare for as much as you can.
2. Communicate and collaborate
Communication is key; though you hear that all of the time, it really is crucial in flexible budget planning. No matter how your team likes to establish your budget, collaborating with both higher-ups and those with “boots on the ground” can allow you to create more real-time updates to your finances, which can shed a light on your budgeting goals. Collaborative budgeting is a great way to get everyone on the same page, and this can be especially easy when you use Cloud-based tools.
3. Manage cash flow and expenses
How does your cash flow compare to last month? Are expenses rising more than they should? Especially due to our current inflation rates, costs are rising across the board for materials, services, and more. Make sure to continually assess your cash flow and if it’s on track relative to your activities, as well as how your expenses are related to your revenue. After checking this out, you may need to update your budget swiftly or reassure your organization you’re on the right track for that period.
4. Continually update your financials
Especially if your organization relies on the teamwork of separate departments, you need to make sure everything is up to date. Just like Christmas lights, if one bulb is out, the entire string of lights might not work! Make sure all of the pieces are correct and timely so your budgeting team can make more accurate estimates. Your organization can also encourage each leader or department head to update their numbers and communicate how things are going to those who ultimately disperse or allocate funds.
5. Prioritize your goals
Everything should come down to this: managing your finances and creating a budget that is best fit for your goals and mission. Whether that be planning for your employees to get a raise this year to match the rates of inflation, leaving room for more charitable donations, or setting aside funds to invest back into your business, your budgeting is essential to the success of your organization. If you use a budgeting tool that helps your organization budget faster and better, it can really help you thrive.
We have great news: Martus Budgeting and Reporting Software can aid your organization to do all five of those things in a simple, easy, and affordable way! Our software allows you to see the budget process as it’s happening and lets you “know the score” at any moment. While there are many benefits to our software, there are a few that are particularly helpful for budgeting in these uncertain times. Our budgeting software:
- Is 100% Cloud-based and accessible by your whole team
- Offers multi-scenario and 12-month “What-If” analysis options
- Allows you to view the status of each budget area
- Analyzes budgets for reasonableness
- Shows multiple budget versions per fiscal year including rolling forecasts
- Lets you easily make mid-year budget adjustments
- Shows multiple intuitive dashboard views
- Includes easy, flexible reporting to show leadership
We created our Budgeting & Reporting Software to make budgeting much more streamlined for you, making it so your non-profit, school, church, business, or organization can operate how they need to. For more about Martus, learn about what we do here or contact us for a free demo today!