Choosing The Right Collaborative Budgeting Tool For Your Accounting Tech Stack

The “one and done” approach to budgeting is a diminishing reality. Gone are the days of creating a budget, getting it approved, and then managing that budget – without any changes – throughout the fiscal year; static budgets are no more. In today’s economic landscape, businesses must be prepared to factor in variables, pivot their strategy, incorporate and adjust funding sources, and update models and forecasts based on new information. As organizations become more dynamic and sales cycles change, regular re-forecasting and ongoing planning are necessary to ensure budgets stay on track. 

A top-down budgeting approach can feel restrictive for program or department leaders. Executives have limited time to review each department’s financial needs or how to allocate budget lines and dollars. This lack of understanding from executive leadership can create frustration among department heads, who feel the budgeted dollars simply aren’t compatible with the actual needs of their team. 

On the flip side, a purely bottom-up budgeting approach may not clearly engage with organizational goals. Department leaders have a better understanding of what they need, but may also request a significantly higher budget in hopes of getting as much as they can. 

Collaborative budgeting empowers all stakeholders, from corporate leadership to department heads, to participate in the budget creation and management process. The results are a balance of top-down strategic vision with valuable input from department leaders, leading to greater buy-in from everyone. Leaders at all levels can discuss goals, better understand strategies and numbers, and then truly begin to recognize and work through any biases. Collaborative budgeting not only leads to a more creative strategic plan and an accurate budget; it fosters healthy communication, inclusion, and flexibility. ​

The Evolving Accounting Tech Stack

Part of the collaborative process is ensuring your organization has the right tech stack to accomplish your goals, serve your customer base, and ensure your team can effectively manage and complete their daily tasks. Technology in the financial planning space continues to evolve, and today reaches people beyond the finance and accounting office as more organizations embrace collaborative and flexible budgeting.

In the past, many organizations chose one all-encompassing software program, hosted via an on-site server, that performed many functions. However, that “one size fits all” approach meant that certain modules simply didn’t work well for some organizations, while smaller businesses were significantly limited by both budget and hosting capabilities. 

The modern accounting tech stack is much more flexible and affordable thanks to cloud-based solutions. Today’s process is less about choosing one perfect tool, and focuses more on a holistic approach that can meet your organization’s current needs and scale with you as you grow. 

Ideally, today’s accounting tech stack is: 

• Tailored to meet a specific set of needs
• Flexible and adaptive to organizational workflows
• Easy to use and understand, even for non-financial employees
• Able to integrate with other software tools
• Cost-effective and easy to implement

Most organizations have accounting software that tracks income, expenses, deposits, and payments. While accounting software is a vital part of managing company finances, it does not offer the best solutions for budgeting, forecasting, and reporting. 

One approach is to use spreadsheets to create the budget, and then feed them into the accounting software. However, this comes with its own set of problems, from security issues to broken formulas to multiple versions of the budget every time you need to make a revision – not to mention the painstaking, time-consuming process of manually consolidating all of the budget spreadsheets into one working, error-free budget. 

​Adding a cloud-based budgeting tool that integrates with your current accounting software creates a collaborative environment without the headache of creating and maintaining a spreadsheet. By using low-code cloud-based tools, department heads can easily create and revise their budgets, while the finance team can deep dive into data for better reporting, giving top leadership the insights they need to make strategic decisions. 

Choosing the Right Budgeting Tool

It’s important to choose a tool that is the right size for your organization but is also able to scale as your company grows. Here are 6 questions to ask yourself when choosing a budgeting tool: 

1. What are my biggest challenges? 
Is the manual consolidation of budget worksheets and version control an issue? Do you need to allocate funding across departmental budgets? Is personnel budgeting causing a headache? By understanding your organization’s budgeting pain points, you can better understand which software solution is going to meet your needs. 

2. How does it integrate with my existing accounting software / ERP? 
It’s not enough to know that a solution can integrate with your current software. What will that integration look like? Some cloud-based solutions work through API integration, while others offer file-based integration. It’s important to understand how the integration will function, what data can be imported and exported, and whether that integration will work in real-time. 

3. What are my limitations? 
Each organization has its own set of budgets and budget lines. It’s important to understand how a budgeting tool will work with your current setup. How many budget lines are included? How often can you re-forecast?

4. What is the true cost – in time and money? 
New software isn’t just about the dollar amount attached to the purchase. Organizations need to account for implementation and training time as well. In other words, once you purchase, how long before you can actually start using the software? A great question to ask during a demo is: What’s your average implementation time, and your fastest implementation time? 

5. Is it user-friendly for my non-financial staff? 
While it’s important to provide training for non-accounting team members, you should also ensure they are able to quickly understand and use the software you’ve chosen. Check to see if the software includes end-user training, and what resources are available on an ongoing basis for anyone who needs a refresher throughout the fiscal year. 

6. Is it secure? 
At a high level, you should ask about software's SOC2 compliance; is the software company going to store and process your data in a secure manner? Have they passed that audit, and is it current?

On a more granular level, consider what security looks like for users in the system when they engage with the software. What kind of permissions and restrictions can you apply to users to create a safe and collaborative environment? For example, if you give a department manager access, can they see only their departmental budget or will they have access to all departmental budgets? ​

Better Budgeting in Accounting

A good accounting tech stack will encourage collaboration, integrate easily, offer clear insights, and most importantly, be a valuable resource throughout the fiscal year. Martus Budgeting offers a secure, easy-to-use budgeting and reporting solution that integrates with more than 20 ERP systems. Whether your organization is new to flexible budgeting, or you’re ready to ditch spreadsheets for budgetingand move into a truly collaborative approach, Martus can help you get up and running in as little as two weeks. 

​Want to learn more? Watch a quick intro to collaborative budgeting below, or contact us to schedule a live demo!