Setting up and maintaining budgets is essential for cost control and spend forecasting. Brightflag offers multiple budgeting methods to help organizations manage legal expenses effectively.
📋Budgeting Methods in Brightflag
1️⃣ Financial Budgets (Top-Down Budgeting)
Setting top-down budgets help you get the most from your matter-level budgets and vice versa. Layer this on top of your existing spend and accruals, along with Brightflag's powerful A.I. forecasting, and you'll have the complete picture!
Configure as many top-down budgets as you would like. Interpret the results by looping in the relevant business partners for their input.
We recommend setting one total budget for the legal function as a whole along with several breakouts of budgets for your various practice areas.
Share the results with your finance team for their thoughts on forecasting.
2️⃣ Matter-Level Budgets (Bottom-Up Budgeting)
Budgets can be submitted by vendors for approval. Involving your vendor in the process helps improve the accuracy of a budget and makes them aware of its importance. For this reason, we recommend that matter-level budgets should be handled through the request and review system (requested by the vendor and reviewed by you).
Alternatively, you can skip the vendor's involvement and set the budget directly. This expands the options for budget type:
✔ Periodic Budgets – Set a time-bound budget (monthly, fiscal quarter, fiscal year).
✔ Phased Budgets – Assign budgets to specific phases of a matter.
🔄 How Matter Budgets Interact with Invoice Review
💡 Budget Overrun Flag:
- If a matter exceeds its budget, invoices may be flagged for review.
- Work with vendors to adjust budgets for accuracy.
📊 Reporting on Matter Budgets
The report builder will provide you with the overall budget for a given matter, along with valuable insights into the Matter details and spend. The All Matters and Matter Spend reports will list the total budget in the budget field. Compare this with the spend in each matter to see which matters are approaching the budget limit.
Factor in the matter details that are most relevant to your business in the interpretation of this data. Grouping the matters by a given quality (e.g. matter category) will help you determine next steps for achieving better predictability and cost control.