Financial Planning and Budgeting is very crucial for an organization. A budget is a policy statement that is prepared in advance to forecast the financial performance.
Budget provides the standard against which the financial performance of a company is measured. Budget is a planning statement that estimates amount to be invested to meet the expenses and return on that investment.
Researchers have identified that Block technology can be applied to improve the efficiency of Budget. They believe that using block chain in preparation of Budget can overcome many issues which finance manager faces while using traditional method.
Preparing Budget is a costly and time-consuming process and it is futuristic in nature and future is not fully predictable. The biggest challenge of the budget is that it is inflexible and becomes irrelevant very soon because of its rigidity. So, organization can ease the process of budget preparation by using digital ledger block chain technology and it will enhance the budget productivity.
Using Block Chain Technology in budget preparation involves controlled information from different key person. This reduces risk of uncertainty and ensure more accurate predictions with valuable insights.
Let see what issues related to Budgeting Block Chain can overcome:
Traditional Budget preparation collects input from many participants, exchange information through email or excel spreadsheet among participants and organize all data at one place. This requires lots of time and effort and sometimes cause error and omission while exchanging data with other participants.
However, Boardwalk Enterprise Block Chain Technology provides a single version for all data planning. All information update by all participants are collected at one place and it is verifiable by other member. So. Finance manager is updated with all inputs while decision making and predictions about the future. Also, Block Chain distributed digital ledger account eliminates the error and risk of omission which may occur while exchanging information through mail.
Finance is the life blood of every company and any information related to finance is crucial. Exchanging information related to financial planning and budget through email and excel spreadsheet may compromise with security and control over data.
Block Chain technology due to its cryptography and secured distributed ledger facilitates exchange of any sensitive financial information among the financial planner with the fear of being leaked or misused. Participants can ensure easy access and full control over the key information.
Using Boardwalk ensures consolidation of data at one place from different participants, required modification by authorized person and visibility of change in information in the process of budget preparation. This facilitates person's accountability and full control over sensitive financial information.
Automation in data consolidation process reduce the planning cycle and employees can use their precious time in some other important work. Digital distributed ledger provides reliable data, accurate prediction which improve the efficiency and reliability of planning process and budget allocation as well.
Thus, digital transformation and block chain technology can revolutionize the process of financial planning and budget preparation.