Accounting Best Practices, Fifth Edition

5–23. Store Budget Information in a Central Database

Too often, a budget manager assembles all of the information needed to create the annual budget, has done so with days to spare, and yet somehow cannot release the budget on time. The reason is that the budget pieces cannot be easily put together, requiring a great deal of labor to rekey them all into a central budget model. The information is especially difficult to assemble if department heads have added new line items for new types of expenses, or deleted or merged existing ones. When this happens, someone must contact the department managers to request a clarification, sometimes resulting in last-minute changes to the underlying budget model that may introduce errors into the budget formulas, resulting in incorrect cost or revenue summarizations. When there are many departments or subsidiaries, it is possible for all these issues to add up to more time to assemble the data than it took for the rest of the company to complete its part of the budget!

The solution is to centralize the budget into a single database. Department managers are issued templates for the budget that are derivatives of this database and they must fill in the blanks provided—no exceptions allowed. When these budget forms are turned in to the budget manager, it is easier to peruse them and determine which revenue or expense line items have been left blank and which additions have been made that do not fit into the standard template; managers can be contacted ...