When I worked for the City of New York at the Office of Management and Budget, we used an insanely outdated DOS-based central ledger to coordinate budgets between disparate departments like fire, police, parks, sanitation, etc.

As a lowly analyst in the finance policy division (NYC’s debt issuing apparatus), one of my job requirements included entering PEGs into this zany system.  A PEG is a Program to Eliminate the Gap, effectively either a revenue increase or an expense reduction.  Expense PEGs could be added using a time-based capital cost estimates, or a notional number of FTEs and a rate per FTE.  They could also be added manually in a lump sum.

During one budget cycle, my boss told me to go find Stu and tell him I needed to add the FinPol PEG.  I dutifully made my way to office of the Assistant Director and relayed what I’d been told.  This very subdued man then led me to a dedicated computer terminal, accessible only with a special password, which his assistant entered for me.  Once logged in, I looked down at the sheet my boss had provided with the details on the PEG, which looked straightforward enough:

FIN POL, REV, 2006: 4,500,000.

The problem: that outmoded central ledger software only allowed for PEGs with up to 6 numerals.

The system assumed entries were in thousands of dollars. And for everyone’s sake, it restricted any errant budget analyst from entering values over $1 billion.  Unfortunately, this PEG represented $4.5 billion worth of bond issuance.

An hour or so later, Stu’s assistant and I had figured it all out and the NYC budget for 2006 was safe.  Phew.

Legacy spreadsheets

In the modern corporate world, outside of a few specialized budgeting software packages, most of the world still uses and reuses some version of the same, old crappy Excel template.  The idea is to provide new budget analysts a template intended minimize errors by keeping things simple.

And indeed, things usually start out simple enough.  But pass that simple template through multiple budget cycles, emergency budget meetings, fund raises, RIFs, and FP&A department regimes, and you’re likely left with quite a mess of a file.

The Problem

From an Excel perspective, here’s a short list of some common errors we see with budget templates:

1. External links;
2. Circular references;
3. Unused data from prior years, which nobody cared to clean up;
4. Inconsistently arranged and formatted workings sheets like depreciation schedules, salary and budget sheets, new FTE’s, capital costs S-curves, etc.;
5. Unattributed comments left in arcane places used to explain why this or that occurred;
6. Heavy file size, causing frequent crashes and increased calculation time.

Our template makes your budgeting process easier

If this sounds all too familiar to you, we can help you reset your budget process.

A note on that though: I’d love to stand here and report that our humble consulting firm has figured out the unified field theoretical budget and reporting process.  But anyone who tells you they have is selling you a very expensive and difficult to implement enterprise software package.

And while we admit there will likely always be a new and different version of Excel chicanery (under the next CFO, of course), our corporate FP&A model is designed to save you time and relieve stress.

1. The Orbis FP&A template uses a macro to copy trial balances and flow them through to actuals every month.  We also provide a separate space for manual amendments to the trial balance raw data.
   
2. We use Excel’s custom cell styles to create a clear bifurcation of inputs, calculations and reports. Only the cells marked as inputs will flow into the calculations.
3. We also provide the ability to write and store commentary on variances in your reports using our automated process.
   
4. We get that your team is being compelled to create multiple budgets (base / low / high anyone?) Our template gives your FP&A team the power to store multiple copies of budgets along with the ability to compare any copy against actuals.
   
5. Taken together, these features create a single source of truth which feeds 100% customizable reports in the model, all using consistent formulae.
   
6. We also enable your team to customize summary reports over different budget versions and time periods.
   

Time for an upgrade?

If your CFO has just handed you 5 years of quarterly actuals along with 4 new budget scenarios and needs an update tomorrow at 9 am on “where we stand,” reach out to us.  We might be able to help you bring some sense to your crazy process.

And regardless of your ability to manage the impossible, we’ll definitely get the right answer for your CFO.

Reach out at either neil.booth@orbisllc.net or ashish.yadav@orbisllc.net and ask for a demo.