There are many approaches to the budgeting
process, and no two companies will tackle this annual exercise in the same way. Whatever the approach, the importance of budgeting cannot be underestimated. Financial experts agree that a refined budget process is one of the single most important things management can do to make a company more effective — and it can return these benefits year after year.

In this article we will describe some of the benefits of an efficient, modern budget process and introduce a powerful tool, Sage Active Planner.

The New Thinking
Traditionally, budgets are an annual exercise
that take months to complete. Often as soon as they are complete, they are in need of revision. Companies often think of budgets solely as a means to control spending. A new way to think about budgets is as a strategic planning tool — as a dynamic, rather than a static process. The emphasis of the modern budget process is on the planning process as a means to achieving a goal rather than an end in itself. These budgets are typically reviewed and revised more frequently — quarterly or even monthly — in response to changing conditions and new data.

A Cost-Effective Undertaking
A PricewaterhouseCoopers Budgeting and Forecasting study conducted in 2007 found that fifty-six percent of budgeting and forecasting effort is spent on low-value activities, including data collection and consolidation, reviews, approvals, and report
preparation.

Improving your budget process can deliver significant returns in the form of time savings and improved data accuracy. Consider these facts uncovered in that same survey:

• The average corporate budget process is four to five months.
• High value people are typically involved.
• Managers spend up to 20 percent of their time budgeting.

With these facts in mind you can see how the return on an investment in improving
your budget process could be substantial. And when you factor in the value of having access to more accurate, up-to-the-minute data, effective budgeting is a winning proposition.

Beyond Spreadsheets
Statistics show that 78 percent of small and medium-size businesses still rely solely on
spreadsheets for budgeting. Spreadsheet software, such as Microsoft Excel, is very capable, supporting the formulas and formats needed for budget and allocation calculations.

However, a spreadsheet application is not the best solution when security and control is
required. It is difficult to limit access to data and to control who can change the basic setup and formulas of the spreadsheets. Spreadsheet applications also become time consuming when you need to integrate data from multiple sources or need to maintain multiple budget versions.

The ideal solution would be a purposebuilt budgeting tool with the ease of use of
the spreadsheet application. If you are looking to move toward a more accurate and efficient budget process, what tools are available to help you? As a Sage MAS 500 user, you can benefit from Sage Active Planner, a strategic budgeting and planning tool that integrates directly with your Sage MAS 500 system. Here are a few of the benefits of Sage Active Planner.


Improved Security And Control
Sage Active Planner protects the integrity of your plan, controls sensitive data, and simplifies data entry by narrowing the choices. You have explicit control over who has access to the overall budget and who has access to sheets within a plan. You even have the ability to lock areas at the cell level to prevent alteration of set data or calculations.

Automatic Integration
Because Sage Active Planner integrates with the Sage MAS 500 General Ledger module,
it automatically will be aware of the fiscal periods, chart of accounts, and account
segmentation you have configured in Sage MAS 500. Imagine starting the budget cycle
without having to manually upload or download data! In addition to the integration with
Sage MAS 500, you also can calculate and deploy values from other data sources including your Payroll or HR applications.

Dedicated Budgeting Functionality
Unlike spreadsheet applications, Sage Active Planner is designed specifically for the
budgeting process. Customizable, pre-built templates speed the creation of budget planning sheets while its familiar spreadsheet style interface makes for ease-of-use.

What-if analyses, such as corporate reorganization considerations, are easy to accomplish with Sage Active Planner. You can reorganize budget structures, including changing planning assumptions and variable drivers, to better gauge the impact of your decisions.

Calculation tools within Sage Active Planner enable you to apply calculations to a
group of columns and spread back to individual periods using factors such as seasonal
trends, business drivers, and prior year balances. You can set up formulas that can be
used by anyone in the system, eliminating the need for users to rekey standard formulas.

In a busy company with multiple departments, locations, or legal entities, consolidation
can be a major task. Sage Active Planner gives you the ability to automate the consolidation of data gathered during the planning process.

Whether you need to allocate a revenue target or cost projection from the top down,
or consolidate several different budget plans from the bottom up, Sage Active Planner will accommodate your organizational structure.

Web Accessibility
It’s easy to involve your remote locations in the budget process with the Web accessibility built-in to Sage Active Planner. The data your remote team enters is available immediately, so the budget process can be completed more quickly than ever before. Additionally, with no workstation component to install, updates and support are simplified.

Sophisticated Analysis Tools
Sage Active Planner gives you additional power to analyze budget and actual data
with Dimensions and Microsoft SQL 2000 Analysis Services. Within a data cube, you’ll
be able to view data in several dimensions (such as by territory, product, and customer), change an assumption or driver, and return it to the plan.

We would be pleased to show you more of the benefits of Sage Active Planner — just give us a call.