Preparing a company budget is a mandatory thing that is done at the beginning of each year of the bookkeeping period. As technology advances, many companies are starting to implement e-budgeting systems for budget preparation. This step is considered effective in order to suppress budget abuse that can actually harm the company in the future.
Not only popular in companies, this budget system has also been adopted by local governments. Budget transparency is an important issue related to regional budget planning or APBD. With the implementation of the system, DPRD and the Regional Development Agency (Bappeda), as well as the public can access, monitor, and supervise the absorption of these funds.
However, how necessary is the application of this system in the financial management of the enterprise? What are the advantages of this system over conventional budgeting? Let’s consider the following explanation.
What Is E-Budgeting?
Briefly, e-budgeting is an information system built to compile budgets. Web-based computer program applications are usually used in facilitating the budget design process. The application of this information technology will make it easier to determine the direction of the company’s policy related to the budget that will be used in the current year.
Openness or transparency is the main goal of implementing this budget preparation information system. Every party that plays an important role in the company or stakeholders can access budget data because the budget preparation documentation has been recorded and stored automatically in the system. The program application has been prepared in as much detail as possible, so that each division in the company can carefully enter the details of the budget.
There are 5 purposes why a company needs to implement this information system.
- Facilitate Budget Preparation
With a well-programmed system, the budget preparation process is easier and faster because all the details of the information have been formatted in the application. In addition, because all systems are included in the internet network (online), everyone can access from anywhere and anytime.
- Improving The Quality Of The Budget
A computerized system like this encourages the accuracy of the budget prepared according to the allocation of each division’s spending. Since all data is meticulously entered, the quality of the budget increases and can be accounted for at a later date.
- Increase Budget Transparency
As previously discussed, the implementation of this system aims to improve the transparency of the company’s budget, so that all stakeholders can access, monitor, and supervise the creation and use of the budget.
- Integrated with other information systems
When the entire company’s Financial Management Information System is integrated, the company’s activity planning process will be easier and faster to do.
- Facilitate The Preparation Of Reports
All financial data of the company is well stored in the existing information system. Thus, the preparation of various types of reports needed can be executed easily, quickly, and carefully.
Advantages Of E-Budgeting
When you compare e-budgeting with conventional budgeting, it will feel how this system can make complex processes simple and save time. Especially, if the company is relatively large and there are many divisions in it. Some of the advantages of this budgeting information system are:
- All Parties Can Access The Budget
Budget transparency is the main advantage of this system. All parties, in this case the stakeholders, can access the budget that has been made without anything that needs to be covered up. This effort can prevent and anticipate the risk of fraud in the management of the company’s budget.
- Preventing Corruption
In conventional budgeting, the act of inflating funds or mark up is still possible. The opportunity to manipulate financial data is wide open when a shrewd person reads the gaps in budget preparation. This can be anticipated with the application of Information Systems budget preparation. Once the data has been entered, the data can not be tampered with again.
- Financial data collection system more effective and efficient
Integrated Information Systems and networks make corporate financial data collection much more effective and efficient. Not only simplify and speed up the process of data input, but the process of control and evaluation can also be done directly or in real-time.
All data is stored in the program, so related parties can easily access the budget anywhere and anytime. This system is also more environmentally friendly because companies do not need to spend hundreds of sheets of paper to print reports. Simply print the necessary reports, such as an approved budget plan.
Thus the explanation of what is the e-budgeting system following its advantages. Now it’s just how the company empowers reliable and honest human resources to run this system so that the implementation goals are optimally achieved.
