QueBIT Blog: 5 Ways to Ace your next Annual Budget process!

Posted by: Ann-Grete Tan

Aug 23, 2021 9:15:00 AM

The busiest time of the year is right around the corner for many FP&A (Financial Planning & Analysis) professionals. Even though some organizations have moved towards continuous planning - typically rolling 12 – 18-month forecasts refreshed quarterly or even monthly – there is still a benefit to stopping and taking stock once a year.

Don’t get me wrong: QueBIT is a strong advocate for continuous planning, which is necessary to supportSystem Healthcheck better, faster decision making especially when the world keeps changing around you! Out of necessity, many QueBIT customers evolved their planning processes towards being more continuous during the COVID-19 pandemic, and many will keep doing so. “Rolling forecasts” are becoming the norm!

Even so, the “Annual Budget” process remains a staple in most companies, and sometimes it cannot be avoided for regulatory or funding-prerequisite reasons.

So, if you are about to get your annual budget process underway, here’s a checklist to make sure (1) you get maximum business value from the effort that goes into it, and (2) the process goes as smoothly as possible.

On maximizing business value

Do your budget models still serve your strategy?

One reason we do an annual budget is to align our plan with our strategic goals, and to come up with numeric targets that we can measure performance against as time passes, which in turn can trigger necessary and timely changes in behavior or direction.

To do this effectively, you need to be working with a model of your business that reflects the realities of your business today. Was a new organizational structure introduced in the past year? Were there any acquisitions? Have growth priorities changed?

If you do not update your budget models to reflect the new realities in a timely manner, you run several risks including:

  • Contributors abandoning your corporate planning application in favor of inefficient, insecure, and error-prone spreadsheets.
  • Losing trust and credibility: the annual budget is a high-stress time for everyone in the organization, especially the contributors from outside finance whose bonuses and jobs depend on them getting it right.

Taking stock of your models before you launch the annual budget process gives you an opportunity to simplify, optimize and adjust ahead of time. Sometimes significant enhancements or new models are warranted. Even if it seems like time is too short to address model deficiencies, it is still worth quantifying the effort and making an informed decision. Even if you do not move forward with changing your model for the upcoming cycle, you may find an opportunity to simplify the process for your contributors: after all, why require people to input detail into an outdated model for no good reason?

Do you have enough time for analysis?

If a large amount of manual work needs to be done before any analysis can begin, it is reasonable to question how much value is being gained from all the effort.

Examples of manual work that is typically part of planning include:

  • Extracting, preparing and validating actual data in “flat file” (CSV) extracts to be loaded into the system
  • Distributing budget templates and instructions by email
  • Collecting and collating data submissions for aggregation, and to report on a consolidated budget
  • Modeling in spreadsheets, for example data mapping, allocations, currency translation, and more
  • Validating, checking and explaining the data and calculations
  • Manual report creation for different recipients

Often the workload can be reduced by investing in small enhancements such as:

  • Automated/direct data integration to source systems
  • Deploying workflow capabilities and/or refining the user experience to make it easier to use
  • Streamlining your planning models so that aggregation is automated
  • Centralizing and automating your models and data, and building validation processes, so that you have a single source of the truth: all your data is trustworthy, and your models (and the formulas/calculations within them) are consistent and explainable
  • Gathering reporting requirements ahead of time, and building re-usable templates wherever needed
    • TIP: report generation and distribution can be automated in some use-cases, for example using a tool like ReportWORQ

Can you turn around unlimited what-if scenarios quickly, and easily compare them?

Ongoing digital disruptions exacerbated by the COVID-19 pandemic has taught us all the value of continuous planning and the ability to evaluate contrasting scenarios in order to prepare for a variety of possible future states. While it is impossible to be prepared for every eventuality, the ability to explore the impact of different business assumptions and compare them goes a long way towards reducing risk.

For scenario planning to be valuable, time is of the essence! A model of your business must be built, so that you can easily change assumptions and business drivers, and quickly see the impact on the bottom-line (and ideally also on your balance sheet and cash flow statements!). If your business has any kind of scale, diversity or complexity, interactive real-time scenario planning cannot be done effectively in spreadsheets. A planning software platform that can provide one-source-of-the-truth for validated data and formulas is capable of supporting collaborative work on complex inter-connected models, but sometimes platform capabilities are under or poorly utilized.

To have the ability to produce unlimited what-if-scenarios, and to report on them easily, it is important to have easy access to trustworthy data, and good models of your business. The two months before launching the annual budget process are a good time to reflect on your capabilities, and evaluate what it would take to improve them. The investment is worth it because it brings you closer to being able to plan continuously (if/when you need to) and it should also free up more time to analyze your business which in turn supports better decision-making.


On the process being smooth and stress-free

1) Are you confident your planning system will be robust and stable?

It is very frustrating to be working hard to meet a deadline only to find that the tool you need to use – your company’s planning system - is failing. Symptoms of fragility and instability include:

  • Slow response times: having to wait before performing the next action
  • System crashes
  • Data loss

Even if it doesn’t seem like anything has changed, external factors can introduce instability to a previously stable system. Examples of such external factors include operating system (eg Windows) updates, increased volumes of data in the system (requiring more resources such as memory or disk space), larger numbers of end-users, changes in network infra-structure and so on.

The way to address stability issues is to take a systematic scientific approach to diagnosing the causes (sometimes there can be more than one). Once the cause has been identified, remedies can be proposed and tested.

2) Are your end-users satisfied with the budgeting experience?

Cast your mind back to last time there was an annual budget process, and try to recall if your end-user contributors experienced any difficulties. Examples include:

  • The system locking up, or going down during busy periods, for example just before deadlines
  • Unexpectedly high numbers of requests for reports and data during the process, in addition to what is readily available in the system
  • People being confused by what they were supposed to do, and requiring a lot of hand-holding and support


The purpose of the annual budget is to support an organization in setting and achieving its strategic priorities for the coming year. Since every year is different (2020 was an outstanding example of a “different kind of year”) it is sensible to take the opportunity to assess your annual budget process ahead of time to make sure it:

  • Uses models that align with your goals, and captures data so that progress towards those goals can easily be measured
  • Uses technology in a way that supports the effort, as opposed to getting in the way and creating more work

The best outcomes come from people being engaged, and people are more likely to engage when the purpose of the effort is clear, and their time and contribution are valued. Their time is best spent thinking about the plan, as opposed to wrestling with difficult technology.

Our recommendation is to do a system healthcheck at least one month before your annual budget season begins (sooner if you can). The questions shared in this article can be used as a starting point. There may not be time to address everything on your wish-list, but perhaps some incremental improvements can be done.

If you would like some help, or another point of view, QueBIT offers healthcheck services for all the major planning software vendors that we work with. Our healthcheck services follow a proven methodology that systematically goes through both business and technology/performance questions, and provides recommendations and advice on options, including a cost-benefit ranking.

Here are links to additional information, by vendor:

QueBIT Anaplan Healthcheck

IBM Planning Analytics Healthcheck

Workday Adaptive Planning Healthcheck


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