Why You Need to Differentiate Between Budgeting and Forecasting

For many organizations, the process of budgeting for the next financial period and forecasting for the same period are often rolled into one financial function. That needs to change. 

Growing organizations are thinking deeper about the difference between a budget and forecast to achieve greater financial results.

The issue for many organizations is a lack of tools, time, and team capabilities to separate the forecasting and budgeting functions.

  • Organizations lack updated, modern software tools.
  • Organizations lack time to perform deeper budgeting and forecasting because they are reliant on outdated, legacy software platforms.
  • Organizations lack team capabilities because financial team members are not empowered to perform separate budget and forecast activities.

OneStream provides a solution that allows organizations to support all three — the right tools delivered through the OneStream XF software platform, a greater amount of time to perform critical financial tasks, and highly-trained team members that are capable of supporting more accurate budgets and more intelligent forecasts.

How Budgeting and Forecasting is Changing

One of the primary reasons why organizations are hesitant to separate budgeting and forecasting is because they do not trust their forecasts. Therefore, they roll budgets and forecasts into the same function to perform token, safe, basic-level analysis.

Most likely, this is because organizations are unable to utilize their current software to support financial processes. Whether you’re using outdated software, Excel spreadsheets, or a combination of both, your financial teams are unable to spit out reliable forecasts.

And, because the process takes so long to complete, by the time management has access to information, your organization is already behind. Unfortunately, this makes forecasts virtually useless.

OneStream has turned this entire concept on its head. The OneStream XF software platform was built for speed, reliability, and forward-looking activity. This is accomplished by logically housing all of your organizational data in one platform — for easy access across the enterprise.

What this means is that organizations using OneStream XF have access to advanced forecasts that can be used to set budgets. And, the forecasting capabilities can break through the barriers of a single forecast for a single period by looking ahead 18 months down the road, not just 12 months.

When your organization implements rolling forecasts, your financial team can continuously plan. They are also empowered to operate in a flexible environment, not settling for static forecasts. 

Essentially, rolling forecasts provide a timely vision beyond the current calendar or fiscal year by enabling your team to see trends or potential headwinds and adjust budgets accordingly.

In the OneStream environment, reliable forecasts dictate actionable budgets. Finally, your team can achieve visibility and flexibility by utilizing forecasts to support budget changes. This is the way forecasting is meant to be utilized in large organizations, not lumped in with the budgeting process.

How OneStream XF Delivers Dynamic Budgeting and Forecasting

If you want to dig into how the budgeting and forecasting dynamic works in OneStream XF, consider these features:

  • OneStream XF leverages dynamic web forms to instantly create/update budgets and forecasts.
  • Guided Workflows help speed up data collection, entry, and validations by your team.
  • OneStream XF captures and analyzes data points from all business units to support enterprise-wide forecasting and budgeting.
  • Rolling forecasts work with other advanced planning techniques such as driver-based planning.
  • Ability to compare budgets vs. actuals to ensure more accurate results and feed data back into forecasting.

Because of the customizability of the OneStream XF platform, organizations can configure the software to meet their specific needs for budgeting and forecasting. This includes custom financial views for users, stakeholders, and decision-makers to access the data they need to support their specific function in the organization in a time-efficient manner.

OneStream solves a critical issue for global organizations by providing the tools, creating the time, and enhancing the team capabilities to help your organization differentiate between budgeting and forecasting processes.

Work With HollandParker to Achieve All Three

Organizations need a unified software platform, they need time to perform critical financial processes, and they need a motivated team to utilize leading software.

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As a Platinum OneStream implementation partner, we are fully capable of supporting your organization’s transition to OneStream XF.

We work with global organizations to implement the software, customize the software according to your specific needs, provide training to your team until they are fully capable of utilizing the software, and ensuring you get the most out of the powerful budgeting and forecasting tools.

Contact us today about OneStream XF software implementation for your organization. We are ready to help your organization achieve all three of tools, time, and team capabilities.

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