Top 4 Reasons Why Your Budget Season Is Painful
Budget season in any multifamily organization can be a challenging and often painful process. Despite its importance, many companies still rely on Excel for budgeting, which can lead to a host of issues. In this blog post, we'll explore the top four reasons why your budget season might be causing you unnecessary pain.
Excel is Not an Enterprise Software Application
Excel is a versatile tool, but it's not designed to handle the complexities of enterprise-level budgeting. It excels at free-form, ad hoc calculations and visualizations, making it less suitable for structured, repeatable data processes. This can lead to errors, inconsistencies, and inefficiencies in your budgeting workflow. While Excel might suffice for small-scale tasks, it becomes a bottleneck when dealing with the intricacies of an enterprise budget.
Arbitrary User Entries Make Analysis Difficult & Unreliable
Many budget models attempt to simplify the process by having users enter "key assumptions." While this might seem like a good idea, it often makes it challenging to analyze why budgets were missed. These assumptions can vary widely among team members, introducing subjectivity and making it difficult to pinpoint the root causes of budget deviations. Without a standardized and structured approach to data entry, your budget analysis remains unreliable, and corrective actions become elusive.
Energy for v2 Rarely Matches That for v1
One of the most significant challenges in budgeting is sustaining the same level of energy, excitement, resources, time, and commitment for version 2 (or subsequent versions) of your budget. The initial budget (v1) often receives significant attention and effort, with teams dedicated to crafting a comprehensive plan. However, as time goes on, this enthusiasm tends to wane. The result is that later versions lack the same rigor and attention to detail, leaving room for errors and oversights.
Budget season is a critical time for any organization, and it requires the coordination and expertise of key executives and team members. However, this reliance on a handful of individuals introduces a significant risk factor. If one of these key persons were to resign or become unavailable, it could substantially disrupt the entire budget/forecast cycle. This risk often materializes just when everyone believes they have everything tightly under control, adding an element of unpredictability to the process.
If your budget season has been causing you pain, it might be time to reevaluate your budgeting processes and tools. Excel, while versatile, is not always the best fit for enterprise-level budgeting due to its limitations. To streamline and improve your budgeting process, consider adopting purpose-built budgeting software that can help you overcome these challenges and ensure a smoother, more reliable budget season. By addressing these pain points, you can transform your budgeting process into a more efficient and effective operation