Small but perfectly formed - software for SME budgeting

17th February 2012

Budgeting and financial planning have never been more important or more challenging for even the smallest business, but the software and systems to manage them have never been more accessible and affordable. So FSN writer Lesley Meall provides an overview of the options.

‘Fail to plan and you may as well plan to fail’ has, like many-a-homily, more than a grain of truth in it; but so does ‘Never put off until tomorrow what you can do today’; as in everything, balance is the key. So it is with budgeting: a certain amount of financial forward planning is vital, but too much time spent on myriad ‘What if?’ scenarios can be counter-productive. ‘You don’t want to lose your focus and damage your business, by wasting time worrying about things that are outside your control and may never happen,’ says Toni Hunter, a partner with the regional accountancy firm George Hay. But even the smallest business can benefit from ‘looking ahead, allocating resources, preparing for problems and opportunities, setting goals and then measuring progress against these’, for key areas ranging from cash flow to one-off projects. 

If you are in any doubt about why this is important, or how to proceed with this, there is lots of information out there that can provide varying degrees of enlightenment. Many banks provide online guidance, and Business Link (which is sponsored by the UK government), includes a guide to business budgeting (that has been created with the help of the Institute of Chartered Accountants in England and Wales). This provides start-ups and small and medium-sized (SME) businesses with advice on what a basic budget should cover, steps that are key to the budgeting process, how a business can benefit from keeping a watchful eye on its costs and revenues, and other related information – along with all sorts of advice and support designed to help SMEs with financial planning and accounts. It even includes templates for cash flow, profit and loss, and sales forecasting, that can be downloaded as spreadsheets.

There are more sophisticated software tools out there, dedicated to budgeting and planning (on which more, later). But the ‘general purpose’ software tool, the spreadsheet, will suffice for the budgeting and planning needs of many businesses, and many of these will opt for the Microsoft (MS) spreadsheet Excel. As this has been ‘factory installed’ and distributed with millions of personal computers it is ubiquitous, and the spreadsheet has been used to automate all sorts of business processes (including budgeting), because Excel is sitting there waiting to be used and it feels free (let’s not dwell on how much this ‘free’ tool has added to the cost of computers). As a result, lots of people have created spreadsheet templates for common business processes, such as budgeting, and these are now widely and freely available.


Key the words ‘budgeting’, ‘spreadsheet’ and ‘business’ into Google (or any other search engine), and then scroll down past the first few product-related results, and you will soon find free spreadsheet templates for budgeting that can be downloaded – though your external accountant or bookkeeper probably has a few that they can make available for your use too. (Add ‘YouTube’ to your search and you’ll find video tutorials too.) In many scenarios, using these templates will be as simple as getting the necessary information together and then keying it in. Some of you may want to automatically transfer data into a spreadsheet from another system, such as the bookkeeping or accounting system used for recording financial transactions. This is straightforward with systems that have ‘send to Excel’ as an option (amongst the ‘reports’); but it’s less simple with those that do not.


It may also be possible to export data in a very simple format called .CSV (comma separated values) and then import this into a spreadsheet system, or use one of the various utilities available online to convert a CSV file to an XLS file (which can be read by not just MS Excel but lots of other spreadsheet software too). On the subject of file formats, and the import and export of data, it’s worth noting that any complications you encounter have probably already been encountered by somebody else; they’ve probably queried it in some sort of online forum; if you hunt around a little bit you can usually find enlightenment. If you are using a desktop personal computer (PC) or laptop that doesn’t have MS Office (and hence MS Excel) pre-installed, you may need to pay to use it. You can download a free reader for MS Excel, but this only allows you to view spreadsheets.


If you don’t have a computer with MS Excel installed (and even if you do), you may prefer the on-demand online version, which is part of MS Office 365 (and a free 30-day trial is available). There are quite a few different permutations of Office 365, which will be more or less appropriate depending on your particular business and its existing IT infrastructure. However, if you are going to opt for an online spreadsheet tool, then there are lots of other non-Microsoft options for you to consider too, and some of them offer versions that are free forever not just for the first 30 days. These alternatives can be accessed in the same way as other on-demand tools (such as Facebook or Google or HotMail), and among those you could consider are: Zoho, OpenOffice, and Google Docs, which all offer ‘MS Office-style’ productivity tools, including a spreadsheet, plus EditGrid, which focuses on spreadsheets - and they all have one big advantage over traditional spreadsheets.


Because online spreadsheet software and the associated data lives on the service providers’ computers (in ‘the cloud’) they can be accessed from anywhere with an internet connection, using a range of devices (think iPad, laptop and smart phone) by anybody with the right permissions. This makes it easy to share and to distribute spreadsheets, and is a boon in ‘iterative’ budgeting scenarios. If you need to circulate traditional spreadsheets among multiple budget holders or get input from multiple directors, then you can easily end up with dozens of emails and attachments, and version control can be nightmare. Online spreadsheets take the pain from the process. As Alan Lewis, from Whale Rock Accounting observes: ‘The spreadsheet has always been an enormously powerful tool, but it’s been transformed by the cloud.’


Although anecdotal evidence and numerous surveys indicate that the spreadsheet is far and away the most commonly used tool for budgeting, there are also lots of software tools out there that claim to be easier, more efficient and more effective; they’re definitely more expensive – but some business users swear by them. ‘It’s not just an alternative to Excel-based budgeting, it’s in an entirely different league,’ says John Kearns, corporate controller at Integra Med, where 50 people across the company are using a specialist budgeting and planning tool. ‘It is just as flexible as Excel, and offers far better control over the process,’ he says, as well as providing ‘easier access to financial information, improved data analysis, and better alignment and accountability across the company’.


It is a testament to the flexibility of spreadsheets that some dedicated budgeting software either uses MS Excel, as with Budget Controller (available ‘on-demand’ for £20) and ExPlan, or has a spreadsheet-like interface. Among the many dedicated  budgeting systems you could potentially consider are: Adpative Planning, BudgetMaestro, Host Analytics, Anaplan and PlanGuru. They can all pull source data in from various other systems, but the levels of functionality vary widely, as do prices, not least because some of the specialist software tools for budgeting, also extend to analysis, planning, forecasting, and performance management – and more. This can make them ideal for some SMEs, but overkill for others, and the ony way you can be sure which is right for you, is to take an online demo or a free trial. Enjoy!