KPI for Budgeting and Forecasting
The Budgeting scorecard allows to estimate current finance resources and plan new resources for the business growth.
KPI Name: Budgeting and Forecasting Balanced Scorecard Metrics
Related KPIs: Retail Sales, Sales, Credit Risk, Retail Banking, Mortgage, Financial Statement Analysis, Market Risk, Financial Risks, Operational Risk, Active Portfolio Management
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Sample reports:
Some reports were generated with Balanced Scorecard Designer for the Budgeting and Forecasting Balanced Scorecard Metrics KPI to show both – Balanced Scorecard Designer functionality and a part of KPI content:
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The Balanced Scorecard Designer software was used to create this KPI.
Description by authors:
Budgeting is done by estimating values for various financial parameters relating to future financial requirements in all organizational activities. This starts with an estimation of ‘sales’, covers the ‘recruitment needs’ to accomplish this, zeroing on the ‘appropriate sources of funds’ and ‘arranging for the repayments of debts, if any’.
Some of the directions in which KPIs can be formed include- Management Perspective, Structural perspective, Continuous Improvement and Learning, and Conformance Perspective.
‘Management Perspective’ can be assessed using indicators such as ‘number of sources and methods used for budgeting and financial forecasting’, ‘% increase in accuracy of forecasting’ and ‘success ratio’.
‘Conformance Perspective’ is to know the extent to which it confirms to the required norms. The indicators involved are ‘objective fulfillment ratio’, ‘% of employees who agree with the estimations’, ‘degree of debt- equity alignment’ and ‘debt coverage index’.
‘Structural Perspective’ can be known by ‘number of supportive elements in the software’, ‘frequency of budget preparation’, ‘cross- checking methods’ and ‘% of data that is from the area for which budge is being prepared’.
Continuous improvement and learning can be evaluated via ‘usefulness ratio’, ‘cost decline fraction’, ‘% decrease in time for budget estimations’ and ‘% drop experienced in deviation’. This helps in using the experience effects that arise from the repeated preparations of budget.
KPI in Excel – Screenshot:
