Budgeting and forecasting in Vena: webinar recap

Finance
Jun 08, 2021

If there’s one thing that finance teams have learned from the covid-19 pandemic, it is the need for resilience and agility – not in the least when it comes to planning and budgeting processes. During delaware’s second Vena webinar, our experts explained how Vena software helps to meet that need by enabling dynamic and real-time planning, budgeting and forecasting.

With economies, markets, supply and demand changing in the blink of an eye, traditional budgets become obsolete before they’re even completed. The alternative? More and more finance teams are turning to driver-based budgeting, tying their key business drivers directly into the budgeting process to build in more resilience.

Driver-based budgeting: your benefits

Driver-based budgeting takes an organization’s key business and value drivers as a starting point, according to Ben Reynaert, business consulting expert: “Instead of taking last year’s budget as a base and estimating a budget for every line item, you first identify the factors that are critical to the success of your business and then define what resources are needed to support them. The number of FTEs needed, for example. From these drivers, you can calculate and forecast costs.

“The benefits are legion. Driver-based budgeting saves a lot of time by eliminating the line-by-line approach. Most importantly, however, it  is dynamic and agile: by keeping a close eye on the main drivers, you can immediately spot the impact of changes and make adjustments along the way. In this way, it allows companies to stay on top of change.”

Company-wide data and collaboration

Another important difference between traditional and driver-based budgeting is the involvement of the business in the budgeting process. While traditional budgets are based on financial information,  a driver-based approach requires operational estimates. This makes it a lot easier for every department to participate in the budgeting process.

“The sales department, for example, needs to input the products, volumes and prices they expect to achieve as well as what resources they need to realize those sales. Once they have completed their exercise, their colleagues from operations and later also logistics are asked to estimate the resources needed to achieve their goals. These estimates are then translated into a financial budget through the driver-based model.

4 reasons to rely on Vena for budgeting

The downside of this approach? It’s difficult to set up through a simple spreadsheet. “While Excel is a powerful tool, it’s not designed to support comprehensive budgeting that involves several departments,” says Ben’s colleague Michael De Meyere, business controlling expert. Enter the Vena platform. During the Vena webinar, Michael and Ben illustrated how Vena supports – and improves – the budgeting exercise.

 

1. Consolidating all information to uncover insights

Vena offers a series of Excel-based templates for specific processes, including budgeting and forecasting, which users can tailor to their needs. The templates automate data transfer, input and validation checks, which helps finance teams save time and ensures control, standardization and consistency in calculations, formulas and methods.  “Vena budgeting templates integrate with source systems to bring company-wide budget figures into one secure platform, in the cloud. As a result, data is no longer spread across spreadsheets and folders, but available in one central location. In this way, you get a single source of truth. That makes it easy to update the drivers in real time and then automatically apply the impact of those adjustments to the forecast, all in the familiar Excel environment,” Michael explains. 

2. Ensuring solid budgets and forecasts

In the first Vena webinar, our experts demonstrated how Vena helps users easily calculate cost to serve (CTS), i.e. what it truly costs to deliver a good or a service based on cost drivers and activities. The cost and margin insights and calculations resulting from the CTS exercise can be used in the budgeting exercise. By combining them with planned volumes, you can create solid budgets and forecasts

3. Facilitating smooth collaboration across departments 

Vena software provides a centralized platform for workflow management, which makes collaboration between people from different departments easy. “You can easily create smart workflows to map out the process, assign tasks, define role-based permissions and set up notifications and alerts,” says Ben. “In the case of budgeting, for example, the business can fill out the data needed, after which the controller gets notified that the task is done and the input needs their validation.”  

4. Maintaining a full audit trail  

To allow budget owners to keep track of the budget process, Vena provides a complete audit trail. Controllers get complete visibility into the process: they can view who did what and when and even go back and view numbers or budgets from an earlier moment in time.

The best of both worlds

“Vena does away with the limitations of Excel, introducing version control, process management and a central repository while retaining the Excel interface that every office worker – and finance people in particular – is familiar with. That is, in fact, the key message in all our Vena webinars,” Ben Reynaert concludes.

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Vena webinar series

Did you miss our other Vena webinar series? Don’t worry! You can read the summaries of the ‘cost-to-serve’ and ‘ad-hoc simulation’ webinars and download each recording on the blog page.

If you have any further questions, don’t hesitate to reach out to us.

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