Your budget can play a very integral role in proactive and informed strategic and operational decision-making. This is further enhanced by the capability to track budget spending in real-time. This allows you to make crucial decisions as you spend or receive funding for a project or procurement. With the growing complexity of business operations, increased competition in the operating environment and rising costs of resources, running your budgeting in manual spreadsheets is simply not efficient and prone to human error. Furthermore, in most cases critical decisions can only be made once your management accounts have been prepared. 

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Cost administration and management are a key performance indicator for those responsible for operations, supply, logistics and procurement. When you do not actively track your budget, you may miss signs you are going off track, often at a great detriment to the business. Software with real-time budget tracking allows you to be on the pulse of your business in terms of cost management. It empowers a business’ management team to be able to continuously and automatically monitor actual spend activity against your budget. This capability generates data in real-time on spending patterns and trends for analysis that can be harnessed to ascertain the spending profile of your business overtime. Therefore, any anomalies in spending outside the businesses profile can be instantly picked and acted upon. Some of the advantages of real-time budget tracking are:

1.              Staying on Budget

Tracking your task expenditures and obligations (pay applications) can help you deliver your project on time and within budget. With a transparent overview, you can quickly identify issues, manage and avoid risks to ensure you stay on track from the start and right through any project/undertaking.

2.              Keeping an eye on essentials

By breaking down a project activity into smaller categories and the corresponding costs, project managers may ensure that every task is completed within the sub-budget. In the event there are issues and growing risk of runway project costs, project managers can localize the costs to that specific task category and apply cost containment management strategies with a high degree of precision and focus. Project monitoring is critical.

3.              Optimized Decision making

You can see how much funds have been allocated in each reporting period (e.g. monthly) and it gives departmental managers the ability to plan spending activities in advance to make sure that they are within their spending limits. They are also able to quickly pick up if funds for a certain product category have been abnormally spent and take tough decisions like holding any further spend on category till the next quarter for example.  

4.              Quicker access to documentation

Some firms continue to utilize pen and paper, and many project managers use manual spreadsheets to track the progress of their budgets. This is concerning since spreadsheet data is prone to user errors compromising its accuracy and completeness. The use of Budget management software ensures reliable data-driven documentation. Project budget tracking systems ensure that all paperwork and communication are digitally stored and accessible in one location that is easily accessible depending on applied access controls.

5.              Reveal Spending habits

Tracking your spending may reveal that you are paying monthly for a service that you do not use, in which case you could terminate the subscription or switch to a cheaper one.

Tracking your spending might also help you detect severe issues with your money management.

Tradata is an integrated, ecommerce B2B, procure-to-pay platform that drives cost savings by digitizing, streamlining and optimizing the procurement, supply and logistics for enterprise, government and SMEs. Tradata is one such platform you can consider to redefine and repurpose your organization around real time budgeting. Click here to begin the journey! Thank you and don’t forget to like and share this post!