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Agile Budgeting, Accounting, and Auditing with Favro

A Modern Workflow for a Modern Workforce

Businesses that don’t traditionally think of themselves as product or technology companies have realized that they must change their organizational mindset and business models to embrace the notion of software everywhere and the reality of required hyper-adaptability. As they transition from projects to products, siloed departments to cross-functional teams, long term plans to iterative sprints, they’re realizing the benefits of the empirical, inspect and adapt nature of agile. Faster time to market, customer-driven products and services, and happier, more productive employees, to name a few.

As the world moves towards business-wide agility, the most traditional parts of the organization are the slowest to change, if at all. Accounting, Finance, HR… in order to achieve the full benefits of agile, these functions need to keep pace. It no longer makes sense to create budgets a year in advance for product teams that are potentially changing direction every few Sprints, based on fast customer feedback and market changes. These long-established and necessary aspects of doing business, whether performed internally or outsourced to a professional services firm, can and are already evolving to embrace the same agile principles and frameworks as the rest of the organization.

This article focuses on the financial side of running an agile business: budgeting, accounting, and auditing. In simplest terms, budgeting is planning how much to spend, accounting is tracking that spend, and auditing checks the accounting process to ensure its validity. All of these functions can be done in an agile way, using existing frameworks. Favro uniquely enables the entire organization, including finance, to use a single app, which is necessary to facilitate the close interdepartmental collaboration required in agile organizations.

Agile Budgeting

The same concept behind agile product development planning applies to the budgets for those product development teams. There’s no point in planning an entire annual budget up front, sometimes more than a year in advance. Of course, you may have last year’s accounting to go by, but this is also when you have the least amount of information as to what the team or teams will actually need to respond to customer demand. Budgets should be created iteratively in cadence with the teams they’re being created for. The Scrum framework is ideal for this. As the team progresses from Sprint to Sprint, it will become apparent what actual financial resources they’ll need much more accurately and in smaller buckets, based on the current pace of development and progress towards business goals.

In Favro, the first step is to create a budget team collection, which will consist of a backlog (list) of budgets to be created and a Sprint board to track their creation. Of course, it’s up to the organization to set this cadence and determine what future timeframe budgets should cover.

favro budgeting backlog demo
Finance Collection


Incremental product team budgets are then pulled onto the Sprint board based on priority and Sprint Planning. The budget cards can be broken down into tasks either on the cards or into task boards of their own.

favro budget team sprint board
Team Sprint and Release Boards

Agile Accounting

Accounting for actual expenditures — both the operating costs of the teams and capital costs — is also done in tandem with development. At the end of each iteration, the budget teams will better be able to inspect and adapt future budgets by comparing the actuals vs. budgeted within much shorter cycles.

Another good example of agile accounting is an accounting firm providing annual federal tax return services. Given the repeatable process of tax preparation, this function is a perfect fit for Kanban.

In Favro, an accounting firm creates a backlog of client tax returns to be prepared and ranks them in priority order. They then create a corresponding Kanban board with the repeatable flow mapped out in columns. The cards are committed from the backlog onto the Kanban board and pulled through the phases of tax preparation, based on team capacity, until completed.

favro text prep kanban board
Accounting Firm Collection

Agile Auditing

Auditing is also a highly repeatable flow, from initiation and planning to final audit and completion. For a professional services firm, a backlog of prioritized client interim and year-end audits combined with a phase based Kanban board is an ideal solution, enabling them to visualize work in progress and optimize flow.

favro audit board
Auditing Firm Collection

Re-usable checklists are implemented on cards to ensure compliance at each audit phase.

favro card checklist template example
Checklist of Audit Phases in Favro Card

Organization Overview and Alignment

Continuing the professional services firm example, using dashboard collections, audit teams of teams, engagement leads, and partners will have a high-level overview of exactly where all clients stand in their respective flows.

favro board budgeting, accounting, auditing overview
Dashboard Overview

True Business Agility

For fast moving agile businesses, finance being able to collaborate with product development teams and all other departments is essential. For agile accounting and professional service firms, client collaboration is becoming increasingly important. Thanks to the flexibility of Favro, which includes the capability to share live backlogs and boards across collections, as well as invite external members and guests to organizations, true business agility is possible.