5 Budgeting Tips for Companies During Uncertain Economic Times

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• Business Budgeting

Over the past several years, our world has seen dramatic changes that have a big impact on businesses. Financial departments in companies face challenges related to the supply chain, geopolitical issues, post-pandemic changes in the world, and an uncertain economic climate. Budgeting strategies that worked a decade ago aren’t likely to work today.

Changing budgeting strategies can be a good thing that sets your company up for success in the future. It’s challenging, though, to change budgeting strategies and plan for something when you don’t know for sure what will happen. However, some strategies and tools can make budgeting easier even when things are less predictable.

1) Watch The Current Climate

Before last year’s U.S. presidential election, a Deloitte survey of 200 CFOs asked respondents what issues they monitor the most closely for potential impact on their companies. Most focused on large-scale issues, particularly geopolitics (56%) and the economic environment (41%). The specific issues these CFOs believed could have the biggest impacts on their businesses were tariffs and changes to corporate tax policies.

There’s still quite a bit of uncertainty about how presidential policy and other factors will affect economics in 2025 and beyond. Savvy CFOs will keep appraised of the current climate and be ready to adapt as the situation changes. You can’t plan for everything, but if you stay informed you won’t be caught by surprise.

2) Prioritize Budget Flexibility

In recent years, supply chain issues, the pandemic, inflation, geopolitical upheaval, and other changes in the larger world have necessitated a lot of changes as companies work to budget. It’s no longer feasible to simply base your current budget on the budget that you used last year because there are too many factors that could change. Things can also rapidly change just within a single year, and static annual budgets aren’t going to be as useful as more flexible budgets that are updated quarterly or even monthly.

Prioritizing flexibility isn’t a new thing. In 2021, Gartner, Inc.’s CFO survey revealed that 72% of respondents considered building flexibility into their company’s budgets a high priority. As the years passed since then, we’ve realized the need for flexibility is an ongoing reality rather than something companies just had to do for a few years.

3) Put Data to Good Use

With so many changes that can affect budgets happening all the time, CFOs and finance teams desperately need accurate, up-to-date data when setting budgets. Timely and reliable data helps paint a picture of the current state of budgets, what might have changed recently, and trends within the company’s financial processes. Good data, a way to sort through all the data to find what’s important, and quality data analytics are essential in today’s business world.

Business process automation (BPA) software can be a huge help with this task. Modern cloud-based BPA software automatically stores all the data related to financial processing. This includes data from documents being processed (e.g. quantities on purchase orders, dollar amounts on invoices) and metadata related to the process (e.g. who approved invoice payment, when a purchase order entered the system). All this data is searchable and easy to access in a digital database that updates in real-time. Reporting tools make it easy to sort and access specific data.

4) Collaborate Across Departments

When organizations adopt a rigid top-down approach to budgeting, the budgeting team can miss nuances within individual departments. Incorporating bottom-up approaches to budgeting, where individual departments submit budget proposals, helps balance that out. Collaboration on a blend of top-down and bottom-up approaches to budgeting makes it easier to create a balanced budget that meets everyone’s needs while aligning with high-level goals.

It’s easier to collaborate—both within departments and interdepartmentally—with quality BPA software. Cloud-based software is easy for employees to access from any internet-enabled device, and everyone uses the same software. There won’t be different versions of the same file on different people’s computers; everyone is working with the same information. It also updates in real-time, enables communication within the software platform, and lets you seamlessly move between programs if you’ve automated multiple departments with NextProcess software.

5) Make Use of Technology

Rapid technological advances present a CFO with both risks and opportunities. Cybersecurity becomes an increasing challenge as companies go digital, creating new opportunities and challenges for enforcing data security. Technology tools like BPA software can help you meet these new challenges and comply with current regulations.

Technology can be a big help in keeping your company compliant with local and federal regulations, especially as policies change. Flexible, configurable software can help your company quickly implement and enforce new policies. You’ll be able to build a lot of the compliance right into your software, making it much easier for employees to learn and follow current rules.

How NextProcess Can Help

In a rapidly changing world, modern budgeting strategies need to prepare a company as much as possible for an uncertain economic future. No one can predict the future or prepare for every outcome, but by keeping an eye on the current climate, creating flexible budgets, analyzing quality data, collaborating across departments, and making use of valuable technology, your company can set itself up for success.

NextProcess’s cloud-based BPA software can give your company a big advantage in preparing budgets. We offer the only suite of business process automation software to provide a true end-to-end solution that covers budgeting, project management, purchasing, accounts payable, and payments. By automating all these processes with the same supplier, you avoid software conflicts while streamlining procure-to-pay and enabling meaningful collaboration. If you want to see first-hand how our software can help your company, contact us today to set up a free demo.