Automating the Planning, Budgeting and Forecasting Process (PBF)

7th March 2016

In this Executive Briefing Gary Simon, CEO, FSN, explores how CFOs can use technology to automate and accelerate the budgeting cycle, liberate time for analysis and drive better performance.





Planning, Budgeting and Forecasting (PBF) are central to the viability and growth of any organisation, yet these core financial processes remain some of the most neglected areas of management endeavour.  The budgeting process in particular is seen as extremely onerous, slow and time-consuming.   Often spreadsheet-bound, one survey suggests that as much as 20% to 30% of senior management time is locked up in the budget process, equating to 25,000 man-days a year in a billion dollar company.1

Another survey2 confirms that 89% of organisations use spreadsheets for planning, budgeting and forecasting process in some shape or form.  And to add ‘insult to injury’, the typical budget is already out of date by the time it has been finalised, leaving management vulnerable to market volatility and unable to exert timely management of performance. Yet despite these drawbacks some companies have been able to make significant strides in process automation. According to one 2015 survey3, median budgeting reporting times dropped about 21% between 2010 and 2014 with notable differences between median and top quartile organisations which typically have more advanced technology.

It seems that CFOs that do not invest in suitable technologies could be putting themselves at a serious disadvantage.

So how can CFOs use technology to automate and accelerate the budgeting cycle, liberate time for analysis and drive better performance? 

The essence of automation

Improving finance technology is the number one method that finance professionals identify for making finance processes more effective3.

There are three crucial elements to automating the budgeting, planning and forecasting processes, namely; (i) to eliminate spreadsheets files as the main method of data capture from reporting units and budget holders (ii) to establish a centralised business model and unified environment which also supports high levels of user-participation and, (iii) to leverage collaborative technologies which enable process control and visibility.

The spreadsheet conundrum

Although spreadsheets are used pervasively in the PBF process it is important to draw a distinction in how they are used.  More than half of organisations (54%) use spreadsheets as their primary or only method of communication and interaction throughout the process4. The remainder use spreadsheets more judiciously, usually as a reporting tool on a shared database.

For the majority of organisations, the budget cycle commences with the preparation of a series of spreadsheet templates at the corporate centre which are distributed via email to budget holders across the enterprise to complete and return. 

But the approach has formidable shortcomings not least of which are the high levels of manual interventions,  the scope for error, the lack of process visibility and the time it takes to complete the cycle. 

Errors are almost inevitable as users grapple with large and unfamiliar templates which are difficult to navigate and master - not helped by time constraints imposed by the centre which sometimes lead to errors and omission in prior period comparatives intended to be a guide to data entry.  Added to which, late changes to budget requirements are almost impossible to implement once the templates are despatched, giving rise to re-issued templates coupled with the added complexity of version control in an already cumbersome process.

But the pitfalls of the process do not stop there. Once the templates are issued, matters are out of hands of the budget administrator who loses visibility of the process, effectively relinquishing control of the timeline to budget holders.  Unbeknown to the budget administrator the template may languish unopened in the recipient’s inbox for several days, potentially jeopardising budget deadlines and squeezing the time available at the centre for consolidation, analysis, interpretation and commentary.

These pressures reinforce the perception of the budget process as a ‘necessary evil’; an inconvenient number crunching exercise, with little time left for cross-functional collaboration and professional challenge.  As a result, stakeholders can feel disengaged and frustrated, doubting the value of the budget and the basis on which their performance is measured.  So is there a better and more automated way of data capture?

A centralised PBF solution

Whether utilising on-premise or cloud-based solutions, modern PBF solutions allow budget, forecast and plan data to be collected via a web browser which instantly updates a centralised model.  And unlike so called, ‘Best of Breed’, i.e. standalone budgeting applications, modern PBF solutions such as prevero form an extricable part of an overall performance management solution which combines budgeting, planning, forecasting, financial consolidation and reporting in a single environment. In effect automating the budgeting and forecasting cycle has a positive knock-on effect on driving performance more broadly since it allows budgets and actuals to be brought together quickly in one place.

But it is the simple expedient of eliminating spreadsheet templates that is the single biggest time-saver in the process. In fact the author’s own research, when running the Deloitte UK performance management practice in around 2001 of the very first 15 implementations of centralised web-based budgeting, showed that there was a virtually instantaneous saving of around 30 to 50 percent of time simply by displacing  spreadsheet in the data collection phase.


The ability to collaborate around a centralised business model allows budget holders and other participants to simultaneously view budget assumptions and outcomes without the need to resort to impromptu meetings, emails and conference calls- as would usually be the case with spreadsheets.

Collaborative workflow technology helps to eliminate organisational and geographic barriers as well as expediting the submission and approval process. And in the latest generation of PBF software, structured and unstructured information can flow unimpeded along the entire length of the budget process, giving authorised users visibility of the information and potential processing bottle necks before they become a problem. Added to which a centralised architecture allows changes to, say, a budget line, accounting policy, or submission deadline to be instantly reflected and available to every budget holder that needs to know – enterprise-wide, saving yet more time. Top performing organisations spend just 53% of their time on data gathering whereas median performing organisations spend 64%, i.e. 20% more time that could have been spent on analysis5.

Accuracy - the unexpected ‘dividend’ of automation

When it comes to budget and forecasting accuracy very few businesses cover themselves in glory, for example, 80% of finance professionals report that the accuracy of forecasts is critical to their business but only 45% believe that their company’s forecasts are dependable5. But eliminating spreadsheets during the early phases of the budget, coupled with the ability to collaboratively engage with all users allows budgets to be finalised with fewer disagreements, revisions and iterations.  High level participation in the budget process and the ability to quickly reach a consensus view of performance leads to far more accurate forecasts – something that would not have been possible without the appropriate supporting technology. So automation not only accelerates the process but it also leads to better forecast accuracy.



Centralised, web-deployable solutions such as prevero provide a compelling business case for change. By leveraging this technology organisations have the power to very quickly transform the budgeting process, cutting the traditional spreadsheet-based approach by up to 50 percent and liberating precious management time while simultaneously improving budget dependability, transparency and control.  In addition, the net effect of a centralised business model (supported by collaborative workflow) is a high level of cross-functional participation, a marked improvement in the ‘richness’ (quality) of the budget, better adherence to strategic objectives and a reduction in the number of budget iterations which dramatically reduces the time taken to arrive at an agreed budget.

And with finance function costs in top quartile organizations being 40% lower than average performing organisations the potential prize is very great3. 


About the Author

Gary Simon, is Leader of the FSN Modern Finance Forum on Linkedin with more than 43,000 members.  He is a graduate of London University, a Fellow of the Institute of Chartered Accountants in England and Wales and a Fellow of the British Computer Society with more than 30 years’ experience of implementing management and financial reporting systems. He is the author of four books, many product reviews and whitepapers and as a leading authority on the financial systems market is a popular and independent speaker on market developments.  Formerly a partner in Deloitte for more than 16 years, he has led some of the most complex information management assignments for global enterprises in the private and public sector. 




Note1  “Beyond Budgeting Round Table”, Jeremy Hope and Robin Fraser October 2011

Note2  “Financial Planning, Budgeting and Forecasting Benchmark Survey”, Aberdeen Group 2013

Note3  “Breaking away: How leading finance functions are redefining excellence”, Finance Effectiveness benchmark study, PwC, 2015

Note4  “Beyond Spreadsheets”, Automating the Financial Planning, Budgeting and Forecasting Process, Aberdeen Group, Nick Castelina, June 2013

Note5  “Unlocking Potential”, Finance Effectiveness benchmark study, PwC, 2013


Disclaimer of Warranty/Limit of Liability

Whilst every attempt has been made to ensure that the information in this document is accurate and complete some typographical errors or technical inaccuracies may exist. This report is of a general nature and not intended to be specific to a particular set of circumstances. The publisher and author make no representations or warranties with respect to the accuracy or completeness of the contents of this white paper and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose.  No warranty may be created or extended by sales representatives, or written sales materials.  The advice and strategies contained herein may not be suitable for your situation.  You should consult with a professional where appropriate. FSN Publishing Limited and the author shall not be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.