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10 tips to improve budgeting and forecasting in finance departments

Budgeting and forecasting equip finance departments to plan accurately and work effectively. Budgeting means allocating funds for expenses and determining whether the outlay will foot the bills. Forecasting, on the other hand, is a continuous process that details the actual costs needed to achieve business results and objectives.

These activities are vital to helping organizations chart their future paths. Here are a few tips that will help companies become more effective in budgeting and forecasting.


Allow your finance departments to improve budgeting and forecasting

1. Integrating Sales and Finance
Integrating sales and finance is essential because it helps create a strategic plan that meets department-specific needs. Since the sales team brings in the money, they must work with finance to build effective roadmaps and budgets. Start by integrating these departments to create a shared vision. A good commission tracking software will ease the integration as it will help the sales team track their dues. Moreover, the finance team can make better forecasts and allocations.

2. Plan for the future
Budgeting and forecasting allow companies to plan effectively. Planning tools can help create accurate budgets and forecasts that are easy to understand for the leadership and teams. Commission tracking software help businesses track revenue and expenses while earmarking commissions for the sales team. Such software help track commissions throughout the sales cycle, from opportunity creation to payment processing.

3. Involve various stakeholders
The only way to build budgets and forecasts that work for everyone is to hear everyone out. Bring every stakeholder to the table and get their insights. This process will help you create the best plans for various scenarios and mitigation strategies.

4. Acknowledge the limitations of forecasting
Even when undertaken with the best intentions, it's unlikely that your forecasts will always be correct. Sales forecasting is a process that requires data, analysis, and intuition.

Forecast strategies must be devised by teams that understand the limitations of their work. This way, they will be well-equipped to adapt effectively to the situation.

5. Be clear
Transparent and open communication from the start allows every stakeholder to share the vision and pull the company in the right direction.

6. Don't rely on prior performances alone
The accuracy and consistency of your forecasts will improve if you use a variety of data points to make them.

A suitable forecasting method should include the following:

  •  Historical data: the most accurate way to forecast is by looking at historical data.
  • Other departments' projections: check with the marketing department, sales team, and human resources team, among others, to gauge their requirements.

7. Empower managers with the required tools
A good compensation plan management solution will help you create, modify, and manage all your employee compensation plans in one place. It will simplify a highly complex process.

8. Pay attention to compensation efficiencies
Not all plans kick off from the beginning, so it is crucial to keep track of how each strategy works and adapt accordingly. Metrics such as efficiency, gains, or effectiveness rate will give you great insights.

9. Use compensation analytics
Compensation analytics is a powerful tool that helps sales managers to make informed decisions on how to incentivize their teams. It helps them set goals, measure performance, and ensure they are aligned with the company’s strategy.

10. Keep it flexible
Be open to changes. Be ready to tweak budgets in tune with emerging situations.

Accurate data allows easier decision-making

To mitigate any difficulties arising from compensation management without compromising information security, finance departments need to implement a platform that automates manual processes and tasks and allows you to make strategic decisions while maintaining your budgets, and Blitz may be the perfect solution.

With a solution like Blitz, finance managers and departments will be able of:

  • Automate time-consuming processes
  • Real-time reporting
  • Efficient budget management

It’s time to boost your finance department's budgeting and forecasting skills! Blitz offers a centralized platform to take care of commission management, track performance, and automate multiple manual processes. Your finance team can use its features to develop future-proof plans and accurate budgets.

Read the case studies in our resources section to discover how we’ve addressed real-life problems for companies in a number of industries.

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