Submit a budget request that includes department, request type, line items, amount, justification

Description

This requirement allows a department head or other individual to enter a line item requesting a specific spend. This spend then gets routed for approval, and if approved goes into the final budget. This is particularly valuable in the context of zero-based budgeting as every new expenditure must be justified.

Example Use Case

Scenario: A non-profit educational institution uses a CPM system for their budgeting process. Each department is called upon to make budget requests annually, covering all areas of proposed spending, such as salaries, program costs, equipment, and other operating expenses.

Solution: Using the CPM system's planning functionality, the department head presents a budget request. The request includes details such as the department name, request type (e.g., operational expense), line items (e.g., new computer equipment), the requested amount, and a justification (e.g., to enhance students digital learning experience). This zero-based budgeting methodology ensures every expenditure is evaluated and justified each year.

Considerations

While this sounds good in theory, it can create an enormous amount of work. Make sure your organization will get commensurate value out of the process.

These submissions can automatically push their values through to the P&L or may be configured to only do so once approved. It may be helpful to have them reflect immediately to give finance a full picture as to the impact of approving everything that has been requested.

Budget requests may have a positive revenue impact over time, such as acquiring more efficient machinery. If the system can accommodate this strategic view, fantastic. However most products will simply calculate the expense.

Questions to Ask a Vendor

• Budget Request Submission: Are users able to enter individual line items, or does the system only allow a summary value?
• Budget Caps: Can the tool cap the user at a specific number or dollar value of requests?
• Workflow Management: Can your system manage an approval workflow for budget request reviews and approvals?
• Scenarios: Can we compare the financial impact of approving some requests and not others in a side-by-side format?