Budgeting is one of the most important responsibilities of a municipal government. It directly impacts everything from managing water facilities, roadways and bridges to contributing to pensions and healthcare costs for employees to maintaining the overall health and future wellbeing of a community. It’s no coincidence that a fair amount of stress goes along with it.
Here is your cheat sheet for avoiding common mistakes that can keep you from smartly balancing your budgets.
DO utilize your enterprise resource planning (ERP) or other budgeting applications for budget entry. Far too often, municipalities rely on spreadsheet applications like Microsoft Excel to enter budgets. While this may offer an easy-to-use and readily available tool, it doesn’t always provide the validation or balance restrictions that are often natively built into a finance ERP. Ideal budgeting tools provide role-based security, so that users only work on the accounts relevant to their role and most importantly, ensure that users are entering data into accounts that exist and using balancing logic to ensure funds stay in balance.
DON’T assume everyone understands budgeting. Many departments lack the finance and accounting training to fully comprehend the budget, so it’s crucial to get to know the people in your departments. Teach them what is important to your organization and train them on how to enter balanced budgets. Make your workplace a culture of budget so that everyone responsible for the budget understands the basic rules of governmental budgeting and fund accounting.
DO run reports frequently to show the balance of each of your funds. Reporting is instrumental in determining whether your organization’s finances (funds, budgets and books) are in balance. Reporting applications like Cognos, Tableau and other business intelligence tools not only help to create reports, but typically integrate data analytics which provides users with limitless opportunities to display data in a way that helps provide a clearer understanding of complex financial information.
DON’T rely solely on spreadsheets in Microsoft Excel for budgeting. It is important not to create data silos. Make sure the tools you use include some sort of data validation where analysis and final balance checks can be done.
DO reach out to your ERP provider or a consulting group for assistance. If your budgeting process has become particularly difficult, don’t be afraid to ask for help. Your ERP provider likely has subject matter experts who can help you implement your budgeting process seamlessly, while consulting groups often will provide services to help assist in the overall budgetary process.
DON’T settle for the status quo! Technology is constantly changing, and it is always a good idea to review your processes and look for opportunities to improve. Decision makers should seek to find the right vendor who will provide their municipality with an innovative, future facing budgeting solution.
If your ERP is not meeting your current needs or have the ability to scale for future growth, it is time to reevaluate. Maintaining the financial health of the community is among one of the most important responsibilities for a municipality. Being fiscally sound is key to creating a responsible future. It starts with smart budgeting.