Making the Shift from Static to Dynamic Budgeting

During AAFCPAs’ Nonprofit Educational Seminar (April 2023), Business Process & IT Consulting leaders Robyn Leet and Dawn M. Pantano, CPA, CITP updated 400+ CFO and Executive Director attendees on ways nonprofit budgeting software can save time, enhance collaboration, boost decision making year-round, and significantly improve productivity.

The full session was recorded and may be viewed as a webcast at your convenience. >>

While Excel remains the go-to budgeting solution for many nonprofit organizations, the use of a basic spreadsheet system for such a complex task can come at a price. Consider the time involved in manual data input and compilation along with any loss of integrity, which may occur as multiple users add and change figures and accounts with the ever-changing business needs year after year. On top of questionable data integrity, many organizations only revisit their budget once annually, so administrators grapple to recall last year’s procedures and drivers. When actual-to-budget reports are created manually, administrators are also faced with additional work, manipulations, and system integrations to keep that analysis current. In the end, decision-makers lack the data necessary to conduct real-time analysis, and this makes it hard to grow as an organization.

Could budgeting software help?

When meeting with nonprofit organizations, AAFCPAs encounters much of the same recurrent challenges across the board—a need for seamless collaboration, for budgeting worksheets and documentation, for versioning and budget-to-actual reporting along with dashboarding to enable real-time monitoring and decision-making. As clients shift from Excel to a more advanced budgeting solution, they gain all of these benefits and more. But what do you need, and where do you begin?

Organizations will first want to document requirements and then research to determine which budgeting solutions meet those needs. Plan to evaluate a range of platforms and schedule a few demos to experience features and functionalities in action. Consider how each solution integrates with your general ledger package. Think about both native integrations, where systems talk to one another, and file-based integrations, which involves data import, export, and synchronization. Make sure you can roll everything up seamlessly and automatically as you add new items to your chart of accounts, as you add new departments, and when you receive new grants. Likewise, make sure your platform of choice will import actual data from general ledger to improve reporting.

An adaptive, collaborative budget.

As effective as Excel may seem, budgeting solutions make it easier to build a basic framework you can refine over time. Create and manage a dynamic, living, and evolving financial plan. Easily build that plan from scratch or import last year’s actuals, adjusting manually or adding a set percentage globally. Incorporate notes and context for approving parties. Streamline modeling to better plan larger, more complex expenses. Add new accounts, move rows, and change columns without the need to update formulas.

Also simplified is payroll, which is not only the largest expense for most nonprofit organizations but the most challenging to budget as well. A budgeting platform helps you develop a more accurate payroll budget whether employing position- or individual-based assumptions. Easily accommodate cost of living increases and raises. Prepare for new hires and terminations. Track full-time employees and allocate to the dimensions you need based on a percentage or dollar value.

AAFCPAs regularly consults with nonprofit organizations that allocate personnel to certain grants. The right budgeting platform can adjust allocation percentages and build reports to show just how those might affect both primary and grant budgets. You also gain the flexibility to dive deeper into expense allocation. Then, once everything looks good, you can post allocations to various departments in a click.

Finally, nonprofit budgeting software provides the unique ability to collaborate in real time. Gain input from program managers, department managers, grant managers, and all the individuals who make an organization operate. Interact with and exchange comments within the platform itself. Once department-level changes are approved, updates automatically roll up into the organizational budget.

While spreadsheets are effective to an extent, a budgeting platform can notably expand your capabilities. It shifts budgeting from a task we manage once per year to one that can be refined year-round. It helps to forecast expenses based on rolling actuals then reforecast after a significant event. Consider where you need to be at the end of the year, then refine your plan to ensure you meet those goals. Provide leaders throughout the organization with the tools they need to monitor their budget continually. Then schedule meetings with budget owners to discuss deviations that might warrant a response. A sophisticated budgeting platform supplies everyone from program directors to board members with the actionable reports and real-time dashboards they need to take immediate corrective action. Beyond this, budgeting software offers safeguards to ensure business continuity in the form of notes and documentation should you face unexpected turnover.

A powerful archive.

A budgeting platform is a powerful, unified repository that houses all historical data and decisions to help you build, refine, and improve your strategy. Look back on a trail of assumptions, review modeling and driver data, and investigate actions taken year after year. Glean insight with improved versioning and what-ifs. Better understand risk and probability within each line item, grant, or program. Build best- and worst-case scenarios, better prepare for the future, understand exactly what affects your bottom line, and put mitigation plans in place.

How may we help?

AAFCPAs’ Business and IT Consulting Practice brings extensive experience in budgeting, accounting, nonprofit operations, and technology including a variety of budgeting platforms. We offer budget process analysis and redesign, software set-up, and full training. We also work with clients to determine system requirements, provide recommendations, and manage a smooth and seamless migration—handling everything from building a connection with your existing chart of accounts to importing historical data and setting-up each line item.

Click here to watch the full presentation.

If you have questions, please contact Robyn Leet, Partner, Business Process Assessments & Attestations at 774.512.4010 or, Dawn M. Pantano, CPA, CITP, Director, Business Process & IT Consulting at 774.512.4086 or—or your AAFCPAs Partner.

About the Authors

Robyn Leet
Robyn brings over 20 years of continuous business process improvement and internal controls experience to AAFCPAs’ diverse clients. From her beginnings as an auditor in public accounting, she learned the fundamentals of business requirements and frameworks. This knowledge was applied to further her impact in her roles as Controller in private, closely-held businesses. These opportunities have bolstered her broad exposure to businesses in multiple stages of growth and with varying levels of needs to validate her insight into the inner workings and requirements of business operations and functions, always looking at the big picture and keeping the client in scope.
Dawn Pantano
Dawn is ideally suited to help AAFCPAs clients develop, implement and maintain IT systems and processes that improve business performance, drive revenue, control costs, and reduce risk.  Dawn specializes in delivering proven technology and business advisory solutions that streamline business processes, and enhance collaboration and information sharing across all functional areas of an organization. She provides strategic guidance on the selection and deployment of key business applications and technologies to meet corporate objectives, and drive productivity. She skillfully and pragmatically answers the question “What do I need most,” so clients may optimize their ROI on technology investments.