Introduction

With budget season now in full swing, many finance teams are likely finding themselves dreading their fragmented and inefficient budgeting processes, and some businesses may be asking an even more fundamental question: should we start to budget and if so, where do I even begin?

For many growing businesses, mission-critical processes like month-end close take precedence over any all others, and tasks viewed as “nice-to-have” like budgeting fall to the wayside, often deprioritized or forgotten about until later. As a result, finance teams often don’t even start to think about budgeting until the company scales, at which point creating and maintaining a budget turns from a “nice-to-have” to a “need-to-have”, and they find themselves scrambling to build a streamlined and integrated budgeting workflow from the ground up. 

For other companies who are currently budgeting, the budget software options on the market simply don’t make the cut. Most growing businesses use QuickBooks Online (QBO) to handle their accounting and financials – but QBO’s budgeting capabilities are very limited and budget software alternatives often don’t sync directly with QBO or can’t handle multi-departmental budgeting in a seamless way. So, they have no choice but to keep their budgets within sheets, which gives them the functionality they need but leads to “spreadsheet wrangling” as they pass sheets back and forth between departments and managers. 

Either way, one thing is clear - budgeting is an essential process for any company, no matter the size or scale - and finance teams need to treat budgeting as a “need-to-have” that helps them analyze and course-correct company spending in real-time, rather than as an afterthought that is too delayed to influence strategic planning. 

So, how do you get started? Read on to learn the main ways companies currently budget with QBO and the pain points that come with it, as well as why FinanceIQ by LiveFlow is the next tool your finance team needs in its FP&A toolbelt. 

How do businesses currently budget and what are the pain points of the process?

Many SMBs use QBO’s budgeting module to maintain their forecasts. But, QBO’s budgeting functionality is very basic, which limits the extent and robustness of the budgeting analysis that finance teams can build:

1. Restrained budgeting capacity leads to inflexible and static planning: QBO only permits one budget to be created per fiscal year, which prevents finance teams from managing multiple versions of a budget (i.e. reforecasting, analyzing across different time periods) or from building a rolling forecast that is updated live as actual financials roll in

2. No real-time collaboration leads to spreadsheet-wrangling: QBO doesn’t have the ability to assign parts of a budget (at the line-item or even GL account level) to different department heads - if multi-department companies need to consolidate budgets across their different divisions, managers and department heads need to email budget sheets back and forth until they’re approved; then, managers have to manually input the budget line-by-line in QBO

3. Limited functionality prevents extraction of meaningful insights: QBO doesn’t allow teams to budget by both ‘class’ and ‘location’ dimensions - they have to pick one or the other - and if teams don’t store departments under a class/location category in QBO, there’s no way to get a breakdown of budgets across departments; additionally, the QBO budget vs actuals report is very basic and doesn’t flow in or out to model drivers or outputs, including exhibits that managers often like to see including dashboards, trend visualization or variance analysis

What alternatives have companies resorted to?

Given all these limitations, finance teams are often forced to keep their budgets within spreadsheets in order to access the level of functionality they need to make budgeting useful in informing strategic planning. 

However, maintaining budgets within spreadsheets comes with its own host of issues:

1. Asynchronous with data stored in QBO and requires repeated manual export of financials to analyze budget vs the latest actual performance

2. Limited collaboration as well as difficulty in reconciling department-level financials with the company-level chart of accounts

3. Inability to budget at the consolidated level (for multi-entity businesses) without the use of complex formulas or BI tools

So, companies are forced to make a choice between storing their budgets in QBO to visualize against the latest financials in real-time or extracting important insights that can only be derived from spreadsheet-level analysis capabilities.

Then how should my finance team approach budgeting?

Enter FinanceIQ by LiveFlow: the only budgeting product on the market that syncs in real-time with live financials from QBO while also maintaining all the functionality and flexibility of spreadsheets. FinanceIQ is the budgeting tool that every modern finance team needs - and here are some indicators that FinanceIQ could be the right fit for your team:

Indicator: Budgeting Structure and Control

• You want to keep your budgeting and analysis within spreadsheets and avoid having to learn a new software or product

• You want to create more than one budget per fiscal year, maintain different budgets for different time periods, or reforecast the budget during the year

• Your company is multi-entity and needs to consolidate financials and budgets across several entities, or you roll up your chart of accounts into a more summarized view

• You want to be able to budget at either the GL-account level or the rolled-up level but still see the end-budget in a simplified view

• You want to assign budgeting ownership of specific line items to each department while maintaining visibility into the master budget and avoiding reconciliation issues

  
  

Indicator: Budgeting Process and Collaboration

• You don’t want to keep manual sharing budgets and passing them back-and-forth with your department heads over email, Slack or other channels

• You want to enable accountability and approval workflows to eliminate version control issues and ensure departmental budgets are reviewed before being layered into the master budget

• You want to analyze budget vs actuals in real-time to track financial performance at any given moment as the fiscal year progresses

If any of these features are applicable, then your team needs FinanceIQ to bring your budgeting process into the age of automation. 

What makes FinanceIQ the best budgeting product for growing businesses?

For modern finance teams using QBO, FinanceIQ is the only way to budget smart and efficiently – freeing up valuable time for more important analysis rather than spreadsheet wrangling and manual budget reconciliation.

Here are a few of the key features FinanceIQ offers:

1. Flexibility: build and maintain multiple budgets at once, and reforecast to refresh budgets as needed while maintaining visibility into previous version

2. Real-time QBO sync: view the latest financials through FinanceIQ’s direct QBO sync without manually downloading data each time; analyze budget vs. actuals in real-time to see how performance is tracking against targets at any point in time

3. Integration with custom COA: current LiveFlow customers can build their budget around their custom chart of accounts created through LiveFlow’s consolidation and account roll-up products

4. Department-level budgeting: assign budget ownership of certain accounts and line-items to specific departments while maintaining visibility into the master budget; filter budgeted financials by classes, location, project, etc.

5. Collaboration and ease of sharing: eliminate spreadsheet wrangling through one centralized hub for budget control, removing the need for manually passing budgets back-and-forth

6. Spreadsheet functionality: keep your budgeting within Excel or Google Sheets to connect with model inputs / outputs, enable spreadsheet-level analysis functionality, and avoid learning a whole new software

Conclusion

Regardless of your company’s scale, budgeting is a mission-critical process for every growing business. Budgeting needs to be used as a tool to not only guide long-term planning but also to course-correct everyday operations by gaining real-time visibility into over or underspending, emerging resources needs, and opportunities for strategic resource reallocation before those insights lose relevance. 

At the same time, modern finance teams need a product that is spreadsheet-native, accommodates multi-entity or department-level budgeting, provides real-time comparison vs actuals, creates trust and accountability, and eliminates spreadsheet-wrangling or reconciliation woes.

FinanceIQ by LiveFlow is the solution. Whether or not you’re currently budgeting, FinanceIQ provides the best way for modern finance teams to enable an automated and seamless budgeting process that guides strategy in real-time. Proactively build your budgeting system before you hit scale or supercharge your existing budgeting workflow with FinanceIQ - book a demo today!