Setting accurate budgets in Brightflag will aid in forecasting spend accurately and controlling costs. There are many ways to achieve this, so this guide will give you a summary of the various options.
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!
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.
A matter-level budget can be set directly by you or requested by your vendor.
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.
- Instruct your vendors to submit a budget request/reforecast, either by month or by quarter.
- From there, your company's matter leads or admins can review the budget to either approve it or reject it and request a resubmission.
- When a budget request is approved, it overwrites the existing values previously entered for that time period. Where the time periods don't overlap, the original entry is retained.
Alternatively, you can skip the vendor's involvement and set the budget directly. This expands the options for budget type:
- Budget by Total: Set a budget for the lifetime of the matter
- Budget by Phase: Set a budget for each phase you have defined in the matter
- Budget by Month: Set a budget by month for the matter
- Budget by Quarter: Set or request a budget to be broken down by fiscal quarter.
You can set multiple budget types for the same matter, however, the latest budget type you have set will be the "active budget". This means that if you decide to change the budget type from Total to Monthly, you can still change it back to Total and the previous entry will be retained.
We typically recommend you set a time-bound budget of Monthly or Quarterly as this allows for greater granularity and more accurate annual forecasting. If the timing of particular tasks is difficult to predict, you can spread the cost evenly across quarters and reforecast the budget regularly based on new information.
How Matter Budgets Interact with Invoice Review:
Any time a matter-level budget has been breached, you will see the Budget Overrun flag on the invoice (this may vary depending on your company's flag settings). Use this as an opportunity to question the necessity of unexpected costs. If the breach of the budget is justified, capture the learnings for why and work with our vendor to set a more appropriate budget.
The "active budget" of the matter will determine when the Budget Overrun flag is triggered, so be sure to set the most appropriate budget type as active on that matter.
Reporting on Matter-level 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 report will list the total of the active 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.
If your company's fiscal year does not align with the calendar year, you can customize this. This will ensure financial budgets and time-bound matter-level budgets are set accurately.
For example, if your fiscal year starts on Feb 1st, Q1 will be considered Feb 1st to Apr 30th. Please Submit a Request to Brightflag Support team to get this changed.