Death, taxes, and budgets … they’ll get you every time

By Steve Horniak

Companies prepare budgets in a myriad of ways, and every different way has its own pros and cons. Every company is constantly assessing and reassessing its budget style to find a better way.

Getting into the field has its merits: you get to meet with operations personnel, hear candid feedback, and really understand what happens in each location. Unfortunately, this also means you don't see the bottom line until after you're home and the consolidation is complete. Of course, the other option-sending out instructions, asking for input on a deadline, and reviewing in a vacuum-has its own drawbacks. Regardless, either option is incredibly time-consuming. Which is why we at Infor found a way to consolidate our corporate budget in five business days.

Yes, five.

It's not easy. There's a lot of behind-the-scenes work and mindset readjustment, but the faster you finish your budgets, the faster everyone can get back to work-and the pay-off is enormous.

So where do you start? First, check the egos at the door. Frank and honest discussions are the quickest way to move through an exercise like this, and there is no time for defensiveness or grandstanding. Second, get all necessary players together in complete lockdown mode. No outside emails-no distractions.  Third, make the effort to have a kick-off meeting to set the tone of the session: everyone needs to know what's expected of them and what their timelines are for delivery. Finally, all business unit leaders must be required to make presentations before the budgeting really begins to make sure they're on the right path, prepared with quality information. Anyone who comes with 'standard budgeting expectations' of a month-long process full of low-balling and sandbagging is sent back to the drawing board.

For our purposes, we had finance and operations employees working side by side making changes in real time through our performance management tool (Infor PM 10). Having a standard chart of accounts that flows through all of Infor's systems allows for easy review and comparison of data across different management teams as well as different periods. From PM 10 we can drill into Infor FMS SmartStream to get all transaction history that allows finance to better understand the trends of the company. Also from PM 10, we can back into our Infor Expense Management tool to validate and challenge travel budgets.

The ability to load all 8000-plus Infor named employees into our application allows us to budget in detail for each employee (salaries, bonus, commissions, car allowances, etc.) at a departmental level, but we manage global events (merit increases, benefits) centrally. All of this allows us to get the largest part of our budget completed accurately. The payroll costs for Infor represent over 75 percent of our direct operating expenses. We know where every employee is supposed to be in terms of their organizational structure and manager.

At the meeting, we had about 25 finance employees actively using the system remotely from the hotel and concurrently with the global accounting community while they did their year-end close. With Infor PM 10, we ran automated, routine consolidations of the budgets, allowing for finance and operations to be able to see their changes in near real time. We can also strip out movement related to currency exchange rates to keep data accurate. When additional data was required for entry into the budget, we could update data entry sheets on the fly. In this way, it never impacts the user because the entry into the budget portal remains the same, only the next time into the application there is an additional required field.

So what are the downsides? You lose some granularity (and some sleep), but questions are answered immediately by coworkers as deeply entrenched as you are, and thoughtful decisions are made as a group. And your budget is done in five days. What could be better than that?

For more information, please visit www.infor.com

Steve Horniak is vice president of Finance at Infor, a position he has held for the past four years.