--- title: Plansmith Blog | community bank budget software (4) description: community bank budget software | (4) --- [CALL TOLL-FREE 1-800-323-3281](https://www.plansmith.reachproductions.net/project/call-toll-free-1-800-323-3281/) [![Plansmith](https://blog.plansmith.com/hs-fs/hubfs/Plansmith-Logo.png?width=764&height=135&name=Plansmith-Logo.png "Plansmith")](https://www4.plansmith.com) - Solutions - [Budgeting](https://www4.plansmith.com/budgeting/) - [ALM](https://www4.plansmith.com/alm) - [ALM Advisory Services](https://www4.plansmith.com/alm/advisory-services/) - [CECL](https://www4.plansmith.com/cecl/) - [Strategy](https://www4.plansmith.com/strategy/) - [Market Intelligence](https://www4.plansmith.com/market-intelligence/) - Products - [StrategyGPS](https://www4.plansmith.com/strategygps/) - [Compass](https://www4.plansmith.com/compass/) - [BankersGPS](https://www4.plansmith.com/bankersgps/) - Resources - [Blog](https://blog.plansmith.com/) - [Videos](https://plansmith.wistia.com/projects/7qemazkqii) - [Compass Tutorials](https://info.plansmith.com/compass-tutorials) - [Lunch N’ Learn](https://info.plansmith.com/lunch-n-learns) - [Webinars](https://www4.plansmith.com/webinars/) - [About](https://www4.plansmith.com/about/) - [Schedule A Discovery Call](https://www4.plansmith.com/contact-us/) - [CALL TOLL-FREE 1-800-323-3281](tel:8003233281) # Plansmith Blog ## [2014: Plansmith's Year In Review](https://blog.plansmith.com/2014-plansmiths-year-in-review) Posted by [Danielle Slowey](https://blog.plansmith.com/author/danielle-slowey) on 12/19/14, 10:00 AM - [Tweet](https://twitter.com/share) [![YearInReview.jpg](https://blog.plansmith.com/hubfs/YearInReview.jpg)](https://blog.plansmith.com/2014-plansmiths-year-in-review) 2014 has been a busy year at Plansmith! We have made some great updates to our products, added some wonderful clients to the Plansmith family, and have been busy keeping up-to-date with the latest regulations and changes in the banking world. [Read More](https://blog.plansmith.com/2014-plansmiths-year-in-review) ## [The Future Risk in Community Banking](https://blog.plansmith.com/the-future-risk-in-community-banking) Posted by [Craig Hartman](https://blog.plansmith.com/author/craig-hartman) on 12/8/14, 10:30 AM - [Tweet](https://twitter.com/share) [![TheFutureRisk.jpg](https://blog.plansmith.com/hubfs/TheFutureRisk.jpg)](https://blog.plansmith.com/the-future-risk-in-community-banking) Since the introduction of the venerable GAP analysis in the mid-1970s, risk management has continued to evolve. It has moved from the basic mismatch of rate sensitive assets and liabilities to more sophisticated techniques – such as prepayment modeling, rate change betas on non-maturing deposits, and rate shocking with parallel rate shifts and non-parallel rate shifts. Then mark-to-market analysis of the balance sheet and the impact on equity was brought in with the attendant benchmarks. These are all interesting measurements of the company’s risk at a point in time. It’s like glancing at your car’s dashboard. [Read More](https://blog.plansmith.com/the-future-risk-in-community-banking) ## [Community Bankers: Year-End is Almost Here!](https://blog.plansmith.com/community-bankers-year-end-is-almost-here) Posted by [Sherri Scott](https://blog.plansmith.com/author/sherri-scott) on 12/1/14, 10:00 AM - [Tweet](https://twitter.com/share) [![YearEndIsAlmostHere.jpg](https://blog.plansmith.com/hubfs/YearEndIsAlmostHere.jpg)](https://blog.plansmith.com/community-bankers-year-end-is-almost-here) Whether your year-end is calendar or fiscal, there are a few things you can do to make the future-you happy. Examiners and auditors thoroughly enjoy marking off their-checklist of items to review and criticize. Most times the request letters ask for the same documents year-after year. Create an exam folder complete with instructions for yourself for the following year. [Read More](https://blog.plansmith.com/community-bankers-year-end-is-almost-here) ## [Community Banks: Establish Goals and Contingency Funding Plans, Part 2](https://blog.plansmith.com/community-banks-establish-goals-and-contingency-funding-plans-part-2) Posted by [Craig Hartman](https://blog.plansmith.com/author/craig-hartman) on 11/3/14, 1:00 PM - [Tweet](https://twitter.com/share) [![UsingPlanningModel2.jpg](https://blog.plansmith.com/hubfs/UsingPlanningModel2.jpg)](https://blog.plansmith.com/community-banks-establish-goals-and-contingency-funding-plans-part-2) In [part one](https://www1.plansmith.com/blog/post/Using-a-Planning-Model-Establishing-Goals-and-CFPs) of this series, we discussed establishing your goals and developing several alternatives or contingency funding plans. Next, we will discuss the remaining 3 rules. [Read More](https://blog.plansmith.com/community-banks-establish-goals-and-contingency-funding-plans-part-2) ## [Community Banks: Establish Goals and Contingency Funding Plans](https://blog.plansmith.com/community-banks-establish-goals-and-contingency-funding-plans) Posted by [Craig Hartman](https://blog.plansmith.com/author/craig-hartman) on 10/21/14, 5:00 PM - [Tweet](https://twitter.com/share) [![UsingPlanningModelGoalsCFPs.jpg](https://blog.plansmith.com/hubfs/UsingPlanningModelGoalsCFPs.jpg)](https://blog.plansmith.com/community-banks-establish-goals-and-contingency-funding-plans) "May you live in interesting times." This ancient Chinese proverb continues to describe the nature of banking. The banking community is going through the most challenging period since the Great Depression. Not only is the economy unsure, but flat interest rates, coupled with new regulation and increased consolidation, have caused massive structural changes within the financial industry. In brief, the task of management has become more difficult. It has changed from a maintenance task to one of survival. Today’s banker must be more sensitive to marketing, pricing, resource allocation, and productivity than at any time in the past. He/she must sharpen their business expertise, marketing skills, investment sense, and develop a tougher attitude toward expense control. To accompany all this, you must have the appropriate informational tools that allow you to assimilate and evaluate the impact of possible changes to the institution’s current and future income. [Read More](https://blog.plansmith.com/community-banks-establish-goals-and-contingency-funding-plans) ## [Community Banks: Bring Meaning to the Numbers](https://blog.plansmith.com/community-banks-bring-meaning-to-the-numbers) Posted by [Craig Hartman](https://blog.plansmith.com/author/craig-hartman) on 10/6/14, 4:00 PM - [Tweet](https://twitter.com/share) [![BringingMeaningToTheNumbers.jpg](https://blog.plansmith.com/hubfs/BringingMeaningToTheNumbers.jpg)](https://blog.plansmith.com/community-banks-bring-meaning-to-the-numbers) Financial institutions are not like other businesses. After all how many other businesses get a daily statement of condition? In what other business is the balance sheet also the product list? It must be remembered that a financial institution’s directors typically come from other industries. For these reasons, it is management’s responsibility to translate the business model, key operating ratios and banking language into terms familiar to directors to insure meaningful dialog. [Read More](https://blog.plansmith.com/community-banks-bring-meaning-to-the-numbers) ## [Do You Balance Your Community Bank's Checkbook?](https://blog.plansmith.com/do-you-balance-your-community-banks-checkbook) Posted by [Shawna Brauer](https://blog.plansmith.com/author/shawna-brauer) on 9/22/14, 4:30 PM - [Tweet](https://twitter.com/share) [![DoYouBalanceYourCheckbook.jpg](https://blog.plansmith.com/hubfs/DoYouBalanceYourCheckbook.jpg)](https://blog.plansmith.com/do-you-balance-your-community-banks-checkbook) It is always interesting to me to hear different people’s views of cash flow – from a personal perspective as well as a business perspective. I regularly ask people if they balance their personal checkbooks. Shockingly - to me, at least – I almost always hear "no". Most people feel comfortable checking an app or logging in online to view their balance periodically, scanning transactions for reasonableness rather than logging debits and credits in an old-fashioned check register. (Full disclosure time…I still use a check register for my personal accounts, so I’m biased here. I find it strangely comforting.) But most consumers feel they have a good handle on their cash flow without writing out the details. If they’re running short on cash they have back-up plans in mind - they can transfer money from another account, cut spending in the short term, ask relatives for a loan or cross their fingers, hold their breath and wait it out. Interestingly, the response I usually hear from small businesses (outside of the banking industry) is that they do have a strong, more formal handle on their day to day cash needs. They keep a check register (albeit mostly electronically, for example in QuickBooks). They know how much cash they need to fund their regular business needs and they monitor their cash flow in detail. They know which customers they need to collect from up-front, and which ones are slow to pay. They have concrete back-up plans if cash runs tight – savings, lines of credit, which bills they can delay paying versus which payments are critical to be paid on time. They know where they’ve been and where they’re trending - positive cash flow is critical to staying in business, so cash flow is always top of mind. Otherwise they’re out of business (and hence not part of my survey.) [Read More](https://blog.plansmith.com/do-you-balance-your-community-banks-checkbook) ## [Is Your Community Bank Ready For Rising Rates?](https://blog.plansmith.com/is-your-community-bank-ready-for-rising-rates) Posted by [Bill Smith](https://blog.plansmith.com/author/bill-smith) on 8/22/14, 11:30 PM - [Tweet](https://twitter.com/share) [![AreYouReallyReadyForRisingRates.jpg](https://blog.plansmith.com/hubfs/AreYouReallyReadyForRisingRates.jpg)](https://blog.plansmith.com/is-your-community-bank-ready-for-rising-rates) Lately I’ve talked to a lot of bankers who are actually looking forward to the inevitable rise in market interest rates. They believe that their institution’s net interest margin and profit will increase because that’s what their rate risk analysis is telling them. [Read More](https://blog.plansmith.com/is-your-community-bank-ready-for-rising-rates) ## [Why Community Bank ALCOs Fail: Staffing the ALCO](https://blog.plansmith.com/why-communtiy-bank-alcos-fail-staffing-the-alco) Posted by [Craig Hartman](https://blog.plansmith.com/author/craig-hartman) on 7/8/14, 3:00 PM - [Tweet](https://twitter.com/share) [![ALCOsFailStaffingALCO.jpg](https://blog.plansmith.com/hubfs/ALCOsFailStaffingALCO.jpg)](https://blog.plansmith.com/why-communtiy-bank-alcos-fail-staffing-the-alco) There is an architecture design concept that says, "form follows function." Once the ALCO has determined what it must do, it must inventory the resources at hand as well as those necessary to make it successful. Among these resources are the men and women within your company whose abilities and perspective will contribute to achieving the goal. It is safe to assume that the general purpose of the ALCO is to control the behavior of the net interest margin by understanding and controlling the factors that affect margin. [Read More](https://blog.plansmith.com/why-communtiy-bank-alcos-fail-staffing-the-alco) ## [Why Community Bank ALCOs Fail: The Wrong Tools](https://blog.plansmith.com/why-community-bank-alcos-fail-the-wrong-tools) Posted by [Craig Hartman](https://blog.plansmith.com/author/craig-hartman) on 6/24/14, 4:00 PM - [Tweet](https://twitter.com/share) [![ALCOsFailWrongTools.jpg](https://blog.plansmith.com/hubfs/ALCOsFailWrongTools.jpg)](https://blog.plansmith.com/why-community-bank-alcos-fail-the-wrong-tools) Now that you have [clarified your purpose](https://www1.plansmith.com/blog/post/Why-ALCOs-Fail-An-Unclear-Purpose) , we can discuss using the right tools. While "No pain, no gain" may be an effective strategy for muscle building, it is counter-productive in margin management. There are institutions that have an entire staff devoted to running asset-liability management systems only to finish in time for the ALCO meeting, only to begin all over again. Just because we can use a computer does not make it useful. We are continually amazed by supposedly sophisticated systems that can require several hours to produce a single scenario. These models discourage creativity and thoughtful analysis. Models should shorten the time and data requirements for use otherwise; no one will want to use them. Planning models are learning tools not predictors. The more scenarios investigated the more we learn about the behavior of our margin and our organization. Speed of operation is not just a convenience, but it encourages learning and allows us to sharpen our strategies. More importantly, speed allows continuity of thought when developing an idea. We get immediate feedback. A model must be efficient to be effective. We can take a good model right into your ALCO meeting and simulate new ideas on the fly. Asset-liability management complexity increases inversely to the volume of data. Effective modeling systems actually generate their own input based on our assumptions using relationships. Prepayments, for example, should automatically adjust by the system for every change in the rate environment. Growth and seasonal distribution of new balances should automatically adjust as rates rise or fall to reflect customer behavior or competition. Models should reduce data entry, save time and give results that are more thorough. When we speak of a models speed, it applies to more than just the computations. Speed, when communicating concepts are even more important to the strategy development. Graphics are the best way to transmit the issues and solutions quickly and clearly. These are not just time series graphs but rather behavioral graphs that become models to use to forecast and explain behavior. Behavior graphics lead naturally to action plans. For example, behavioral analyses using multiple rate shock simulations allow us to describe a completed asset-liability management analysis into a quick and complete display or description of yield and margin behavior. Through graphs, we see both description of the problem and the solution simultaneously. No other format provides this prospective. Using these powerful tools, we turn complexities into simplicity. At the risk of branded a heretic, let me say that the solution to margin management is not to be found in the accounting systems. Regardless of the linkages between general ledger, accounts payable, fixed assets, investments, loans, deposits and your asset-liability management system, the answer is not there. The data in your accounting system is the history. Bankers are often so rooted in their general ledger, that they mistakenly believe that they must pull data directly from the mainframe or they cannot do and effective job. Although that is comforting, asset-liability management and the ALCO must deal with the future, not the past. Check back for the final part of this series, ["Why ALCOs Fail: Staffing the ALCO"](https://www1.plansmith.com/blog/post/Why-ALCOs-Fail-Staffing-the-ALCO) . 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