In many case, and in the ideal world, you would like to have an Excel template that covers both Budgeting (the short-term view) and Business Planning (the mid-to-long-term view). And that makes sense for a number of reasons:
- The Budgeting manager is often responsible for Business Planning as well
- The short-term Budget needs to be consistent with the long-term Plan
- The Budgeting tool needs to integrate with the Business Plan tool.
So rather than using 2 separate tools, having a combined tool covering both Budgeting and Business Planning can solve a lot of headache. Unfortunately, there is no perfect world, and what you gain on one side, you tend to lose on the other side:
- Budgeting and Business Planning have conflicting objectives: in a Budgeting tool, you want to capture the near future with a lot of details; in a Business Planning tool, capturing the the medium (3-5 years) and long term (7-10 years) view correctly is more important than being precise in the short term. As the saying goes: “It is more important to be approximately right rather than precisely wrong”
- Standalone Excel templates, for Budgeting on one hand, and Business Planning on the other hand, are always going to be better. Each template can remain totally focused on the problem as stake, and doesn’t have to make compromise.
Another big issue is that Budgeting is inherently a multidimensional problem. Ideally, you want to capture the following:
- The time axis: months, quarters, years
- Multiple products (e.g. Voice, SMS, data)
- Multiple customer types (e.g. Prepaid, Postpaid)
- Maybe multiple regions (geography)?
- Maybe multiple business lines (e.g. Mobile, Fixed, Broadcasting, Mobile Money etc)?
- Cost Centres: anything between 30 and 200. You want to budget by cost centre, right?
- Chart of Account: anything between 100 and 1500 accounts. You want to integrated the Budgeting with your ERP, right? With automatic data import as well, right?
- Maybe multiple users of the budgeting system, with various roles (administrator, contributors etc)?
Unfortunately, Excel is neither a database, nor a multidimensional database. So you have to make multiple compromises, to keep your Excel Budgeting tool manageable. The template below is the result of a number of trade-offs, in particular:
- We have excluded Cost Centres and Chart of Accounts. Including them makes a Budgeting tool in Excel extremely cumbersome, even with few Cost Centres (10-20) and few accounts (100).
- We have excluded geography, as it adds complexity in the Budgeting tool that Excel is not good at
On the other hand, we have retained the following key elements:
- The time axis includes months, quarters and years
- Budgeting and Business Planning are integrated in one single template
- Multiple products are captured
- Multiple customer types are captured
One final note: if you need anything more advanced, then you can’t do it well in Excel. You need to use a professional solution based on a multi-dimensional database. We recommend using Adaptive Planning.
Download the Budgeting and Business Planning Excel template now!