Business budgeting is a pragmatic approach to outline the financial and operational goals of an organization. A carefully considered budgeting process is essential to operate and benefit the businesses in the constantly changing market scenario.
Automated budgeting is in trend today. Organizations today are getting used to business budgeting process with the help of augmented and systematic software solutions for several reasons. According to a recent report, 43% of the US-based businesses use software to manage their annual budgets.
Budgeting software helps the organizations to estimate their future revenues and expenses and forecast the differential profit or loss.
While the majority of accounting platforms offer basic features of budgeting, organizations prefer adopting appropriate business budgeting software solutions to obtain advanced functionality with the budgeting process. Wondering how? Let us check this article.
Corporate or Business Budgeting Software
A budget is more than a set of numbers. It gives a vision to your company and determines what you can achieve in a particular period. Hence, the majority of firms gear up to have a sincere budgeting process for every fiscal year.
Smaller companies can rely on simply drafted short-term budgets, but for big organizations, corporate budgets are specially designed by the financial experts. The corporate budgets can be prepared for annual, quarterly or monthly financial plans and then, the budgeted data can be used to track the performance of the company against the actual result at the end of the year.
The old-school methods of budgeting have become far too onerous for the individuals as well as for the businesses. You can hardly see anyone these days carrying the old-fashioned ledger books to record their financial transactions. Even creating Excel spreadsheets sound like creating the world’s toughest homework assignment for some people. That’s where personal finance and budgeting software comes in.
If you ask what business budgeting software does, it makes the businesses getting used to automated budgeting process with the help of;
- The projected sales for the budgeted period.
- The direct cost of the sales.
- Fixed costs or overheads.
Capital Budgeting and Analysis
The capital budgeting process allows any business to understand and check its potential for large expenses and investments. Here, the experts analyze the estimated amount of money required to invest in the business along with the expected amount of revenue generation from the project. Sensitivity analysis leads a firm to determine the risk factor associated with a particular project while making capital budgeting decisions.
What is the 50-20-30 budget rule?
An American Senator Elizabeth Warren is the person behind this formula. In her book, “All Your Worth: The Ultimate Lifetime Money Plan,” there is a mention about the exceptionally popularizing 50-20-30 budget rule among the big, medium, and smaller market participants. It includes dividing after-tax income into three sections where 50% part of it should go to fulfilling unavoidable or most essential needs, 30% should go to the actual and inevitable wants and rest of 20% to the savings.
In the case of corporate budgeting, the terms differ. Here, the finances can be broken into three different areas i.e., 50% to necessary business expenses, 20% to financial goals and, 30% to organizational development.
Types of Budgeting Programs offered by the Budgeting Software Solutions
Businesses use majorly four types of business budgeting software solutions, and they are:
- Incremental Budgeting Software Program – It takes last year’s actual figures and subtracts or adds a percentage to obtain the current year’s budget.
- Activity-Based Budgeting Program – It includes the top-down budgeting approach where senior management prepares a high level of budget for the company based on its objectives and then pass it on to the managers for implementation.
- Value-Proposition Budgeting Program – In this approach, a budgeter decides upon why a particular amount is added in the budget, does the item included creates value for staff, customers or, stakeholders and is it overweighing its cost.
- Zero-Based Budgeting Program – This technique includes allocating funds based on necessity and efficiency instead of based on budget history. This budget is developed by the management and only consists of the operations and expenses that are essential to run the business.
Integrations to a Business Budgeting Software
Top benefits of business budgeting software solutions are:
- Web and Excel integration to the software
- Ability to analyze and report
- No cost charged for additional software modules
- User-friendly software
- Self-sufficiency, i.e., no or very low reliance on consultants
- On-premise or cloud-based software
- Strong server for back-end
- Audit trail for rolling back errors and confirming who made certain changes and when.
How to create a Budget?
Budget forecasts the outcome between incomes versus expenses. It covers a firm’s revenues, expenses, cash flow, and financial position. Budgeting software helps you to calculate the approximate annual expenditure in front of your yearly income. A generalized formula is enough to set a budget i.e.
Two simple, but essential budgeting rules for World’s Easiest Budget:
- Don’t spend more than you earn.
- Money should move into the budget categories as soon as the income received.
Here follow the steps that can help you to make a budget for your business:
- Determine timeline
- Agree on goals
- Understand the current financial status
- Agree on budget approach
- Develop draft expense budget
- Develop draft income budget
- Review draft budget
- Approve budget
- Document budget decisions
- Implement budget
Basic Business Budget Sample Worksheet
What happens when you don’t have a budget?
When you don’t have a budget, your overspending practices could lead you to debts. Average credit card debt is the biggest threat in such a case.
Any surprise expenses can throw you off the track if you don’t have a planned budget for your business. Flying blind in this case will make you challenging to remember which bill is due and when.
When you don’t have a budget, you would not even know how much you could save for any project. Instead, you waste money unnecessarily, and without a perfect spending plan, you fail to achieve the goals of your business.
Significance and Key Features of a Business Budgeting Software
The ability to do complex calculations, modeling any business data, web-based client software, excellent vendor support, multi-user access, managing project management overheads, and flexibility for your business needs are some of the basic features that users get while using a good business budgeting software.
As you are aware of how a budget-less situation can restrict the financial progress of your organization, and manual budgeting is open to human error, a business budgeting software can resolve many of such serious issues. The best thing is that the budgeting tools can efficiently deal the mathematical functions through inbuilt computing process and bring the most appropriate calculations for budget forecasting. Now, let us see what significant benefits are when you are using business budgeting software for your firm.
- Business budgeting software helps businesses to have more control over their operations. When revenues stray from forecasts, the budgeting software tweaks your budget at some point.
- The software helps you to determine how much you can spend on different operations without draining your finances. Current and previous budgets are compared to check the improvements and help the staff to plan finances further.
- If you have a construction company where static or fixed budgets are allocated every year for the storage, budgeting software helps in cost control operations in that case too.
- Budgeting software reminds you of your previous transactions through records, and hence, it helps to limit your spending.
- The software helps in the effective management of cash flowing in or out of business within a specific time.
- Automated budgeting and keeping track of expenses improve your plan for growth.
- Business budgeting software helps in calculating your business’s net worth or the amount of asset you own without the debt.
(Image Source: Google)
Free and Open Source – The Best Business Budgeting Software Platform
Some of the best free and open source business budgeting software solutions are handled and managed by the powerful networking community that always supports from the back-end to maintain its definition and guidelines.
Open source budgeting software programs can be downloaded for free, and due to extensive usage, they have much more online support available than other types of software programs. Variety of open source and free business budgeting tools are now available with more flexibility, higher reliability, lower or no cost, and no-predatory vendor lock-in. Let us check the list of some of the best free and open source business budgeting software solutions that are ruling the market.
Today, a budget has no longer remained a simple tool that forecasts yearly income and expenses. It has become strategic planning support that shows the right direction to a company. What the budgeting tools hold and how they are different from one another can be easily understood by viewing the comparison chart given below.
Now, let us check in detail what each of these software solutions can offer us and why they are rated at the top among all popular free and open source business budgeting software solutions category.
dsBudget is a simple, free, and open source budgeting platform for all types of users. The software runs on your PC and operates on all platforms, i.e., Windows, Linux, and Mac. It supports multiple languages and currencies and uses the browser as a user interface. The dsbudget_2.0.24.tar.gz is the latest version of the software available to download at dsBudget, and it is licensed as per GNU GPL v2 licensing norms.
- You can carry dsBudget application as well as documents on your USB stick.
- The software needs Java 6 to be installed on Mac 10.6 X.
- A single dsBudget document can be accessed from multiple installations of dsBudget making use of DropBox.
- The dsBudget software can run without using the internet connection, and so, you can rest assure that your financial details are safe and secure.
- Managing operating expenses efficiently during financing is the forte of the software.
As a simplified free and open source budgeting and personal finance software solution, Buddi is released under the GNU General Public License. Currently, it is available in multiple languages and allows everyone to have free access to the source code. The latest version Buddi 126.96.36.199 of the software was released on April 3, 2019.
- Buddi software runs on almost all the systems installed with Java virtual machine (Java 1.6 or a higher version is required for current versions of Buddi).
- It also works on Windows, Macintosh OS X, Linux, and many other operating systems.
- Buddi software plugins include Report plugins (to make new reports for Buddi), Import / Export / Synchronize plugins, and a generic type of plugin that is capable of extending the software’s core functionality.
- Custom plugins can also be created on request and consultation.
MoneyManagerEX is the most popular cross-platform, easy-to-use, free, and open source budgeting and personal finance software. The stable version of the software is Money Manager EX Desktop is 1.3.3. Its desktop version operates on Windows, Mac, Linux, and the mobile version on Android 2.2 or higher.
- The MoneyManagerEX software imports data from QIF (Quicken Interchange Format) and CSV (Comma-Separated Values) files and export data to QIF, CSV, and HTML.
- Free downloading is facilitated without ads and charges and can be used, changed, and shared by anyone.
- The software facilitates more than 30 translations and provides the interface to the users in their native language. Documentation facility is also available in 8 different languages.
One of the leading budgeting and personal finance software – BudgetPulse is the perfect solution to manage their finances. The software requires Internet Explorer 7 or 8, Firefox version 3 or later, or Safari to run the system. The software facilitates working from any country with providing better budgeting with no security risk.
- Quick sign-up process with an instant confirmation email to join hands with BudgetPulse.
- Users can get a single monitoring point using a comprehensive dashboard offered by the software.
- The software offers quick ‘tag transactions’ with multiple references to improve financial tracking.
- VeriSign SSL security measures are implemented to safe and secure data transmission.
- The software import QIF, QFX, and OFX data files from banking and credit institutions and imports spreadsheets too.
MyBudgetView is a free budgeting software that provides you the clearest possible view of your finances and helps in achieving your important business goals. The project started in 2006, and BudgetView-4.03 is the latest stable version of the software made available to the users.
- Quick installable software to download in your system with free application and payable add-ons is made available to the users.
- The budget data can be transferred from one computer to another using ‘create backup’ and ‘restore backup’ functions from the File menu.
- Users can use several bank accounts while budgeting with MyBudgetView.
- The ‘split’ button is given on the right side of the screen for selecting the corresponding transaction in the categorization view.
Founded in 2017, Divvy is free budgeting software that comes with end-number of features for its usage. It is a fully automated platform that works on Mac OS, Web browser (OS agnostic), Windows 10. It integrates with the majority of accounting software like G Suite (Google). It is headquartered in Lehi, UT and has more than 50 employees and 450 customers.
- Expense tracking, seamless, enjoyable, web, and app-based features are associated with the software.
- Divvy is robust cloud-based expense management and budgeting application that comes with a better UI to the users.
- The software automates expense reporting and integrates with accounting platforms for faster and accurate accounting.
- Virtual Cards is another facility with Davvy financial systems and help users earn points for further spending on shopping, traveling, etc.
One of the exceptional budgeting and financial management programs, Budgeter is a simple and easy-to-use tool. It is the best money management and tracking system that comes with open source software licensed as per GNU General Public Licence version 2.
- Budgeter is a free budget calculator that plans your spending day by day.
- No downloads and no installation is required. The software can instantly work online for quick budget calculations.
- Calculations are similar to maintaining spreadsheets with not many technicalities required from the user’s side.
- The software assures absolute security and safety of user data, as not much personal data is required to proceed further.
If you are already using one from the software solutions listed above, you can freely share your reviews here.
Incredible virtual assistance enabled by advanced software systems helps businesses in real-time collaboration and quick decision-making. In fact, the inclusion of non-financial data has become possible in forecasting activities due to the utmost accuracy and security measures associated with such systems.
Nearly all businesses have become more algorithm-based, and artificial intelligence has taken over the grip of operational activities leading to significant time and money savings. According to a report by Century Link Bright Ideas, 55% of businesses have experienced a considerable increase in their yearly revenues in the year 2019, by investing in the smart-tech budgeting solutions.
The enhanced percentage of cyber security investments in 2019 has eradicated possibilities of cyber threats and data breaches and has pioneered usage of secure systems and trusted applications for business finance related matters. Budgeting and forecasting sectors are one of the top users who see major benefits with advanced and secured software solutions.
When the risk factor to a project increases, it automatically increases the company’s production cost. However, the planning, budgeting, and forecasting methods utilizing a good budgeting software program controls the financial operations and ensure longevity in the business.
She is an IT graduate, a research enthusiast, a gadget lover and a tech writer. Sarah loves to explore every new innovation in the field of technology to help meeting quests of the readers regarding knowing about new gadget in the market, tech news and publications as well. She is a professional Research and Tech Writer at GoodFirms.co
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