Annual budgeting got you down? If so, you’re most certainly not alone. In fact, this business priority is one of the biggest causes of stress and anxiety among executives, particularly those who are working under the concept of zero-based budgeting. If you’re not familiar, the Wall Street Journal defines this type of budgeting as, “requiring managers to plan each year’s budget as if no money existed the previous year, rather than using the typical method of adjusting prior-year spending. That forces them to justify the costs and benefits of each dollar every 12 months.” Let’s examine this a bit more closely and also take a look at how robotic process automation might also play a role.
The zero-based budgeting methodology was recently thrust into the spotlight thanks to a handful of major acquisitions that occurred. As a result, many experts believe that it’s a sign of things to come for businesses of all sizes. So, even if you’re not planning any mega-billion dollar merger or takeover, becoming more familiar with this new type of accounting is probably wise. Equally important, understanding what tools are available to you that can make a transition to zero-based budgeting more feasible and much less stressful is also key.
Anyone with P&L budget responsibilities is already well aware of the increasing pressures and heavier workloads placed on them at certain times of the year. Zero-based budgeting takes this to the next level, requiring an annual reevaluation of every single operational component of the business. This includes, but is not limited to, justifying payroll and operating expenses, both your own and those under your authority. Are you comfortable that the numbers on paper will accurately demonstrate how hard you and your team are working day in and day out?
Obviously proving value within any budget isn’t anything new. What is different with zero-based budgeting, however, is the degree to which the “powers that be” will assess and weigh that value. This is where robotic process automation can be a game changer. And RPA is nothing new either. In fact, the use of software robots in the business world has been around for quite some time, though it was primarily automation of IT processes and incident management that took center stage. Today, robotic process automation is making an impact on the business world as a whole, and its value can especially be felt in the budgeting process.
Think about it. By shifting most or all of the menial, repetitive tasks that are bogging you and your team down on a daily basis over to machine, you’ll accomplish two main things. First, you’ll dramatically improve efficiency. The work will get done faster and without the risk of costly human error. Second, your human personnel will be freed up to focus their skills and resources on more critical business matters. Both of these things can have a positive impact on how the so-called bean-counters view the output of you, your team, you department or your division. Couple this with the fact that RPA will also lower operational costs and you’ve got a winning formula for success.
Why does RPA fit so well with those adopting zero-based budgeting? Simple. Because the ultimate goal of this methodology is to identify and eliminate unjustifiable expenses. And it’s not about robots replacing humans. To the contrary, this type of accounting often helps to pinpoint specific operational tasks and workflows that are negatively impacting productivity and therefore costing the company too much money.
Take, for example, a person who is responsible for onboarding new team members. This is only a small portion of his or her daily job, and it’s something that’s completely justifiable because it’s necessary. What isn’t justifiable, however, is the fact that said employee is spending an additional 15% of his or her time fixing errors. By honing in on that area of inefficiency and introducing RPA into the process, the workflow is thereby streamlined, errors are reduced, time and resources are better allocated and the budget is back on track.
Whether or not your organization is currently utilizing zero-based budgeting or may consider doing so in the future, robotic process automation is something that can benefit any accounting methodology. After all, what company wouldn’t benefit from greater efficiency, higher output, fewer errors and overall cost savings all around?