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Winning the Financial Planning and Analysis Marathon

Winning the Financial Planning and Analysis Marathon

Financial Planning and AnalysisYou’ve heard the adage, “If it isn’t broke, don’t fix it.” But what if something is ‘broke’?

With only 40% of finance executives finding their financial planning and analysis ‘effective,’ why are so many of them content with complacency?

It’s obvious, of course, that something in the financial planning and analysis process is broken, yet so few look to make a change. What drives finance executives to ignore the uncertainty that plagues them every day, and what effects does this lack of certainty have on businesses?

Customer demand shifts, government regulation changes, even weird weather patterns—all can have drastic impacts on businesses today. In publicly traded or pre-IPO organizations, proper planning and analysis can be life or death for organizations and stakeholders.

What is Financial Planning and Analysis (FP&A)?

There are many definitions of Financial Planning and Analysis (FP&A), but one from SynFiny Advisors rings true:

“The critical value creation processes, which requires a deep understanding of business fluency, finance, modeling, data systems and processes, and accounting. This typically combines financial and non-financial data as required to create strategic and operational financial plans. When done well, these processes are a clear competitive advantage and thus are viewed as critical by senior leaders.”

Seven Processes in Financial Planning and Analysis

FP&A can be broken down into seven categories:

  • Strategic Planning
  • Budgeting
  • Forecasting
  • Management Reporting
  • Financial Analysis
  • Capital Planning
  • Business Modeling

Why do FP&A Teams Struggle?

One of the biggest causes behind struggling FP&A among finance teams, according to Mary Driscoll of APQC is the lack of time.

Two thirds of participants in the APQC survey said their finance teams are always swamped by basic financial management duties such as periodic forecasting of how performance is trending versus annual budget targets. They have little time for, say, investigating cost drivers or testing the probable outcomes of bundling and pricing options.

Inefficient solutions for basic financial management duties lead to even more inefficient FP&A? According to Ms. Driscoll, this is nothing new. CFO Magazine was writing about this exact same issue in finance over 20 years ago, quoted, “to be relevant in the pursuit of strategic objectives, finance teams had to become stronger business partners and generate analyses that help decision makers increase economic profit.”

What’s the Cure for Faltering FP&A?

As mentioned previously, companies seek the ability to efficiently manage basic financial duties before moving to the advanced FP&A duties. A cure for this—automation—could be the first step in winning the FP&A marathon.

Start with Automation

Automation of simple processes in finance is the first step to prevent finance teams from being “swamped” by manual, error-prone processes; allowing your team to focus on the long term strategy.

Learn more about the impact of a highly automated and accurate financial platform using the following resources:

Enhance with Effective CPM

The next step in developing an effective FP&A strategy is to find something that can enhance business agility and allow your team to gain better insights into the planning, budgeting, and more, including:

  • Financial consolidation and disclosure management
  • Budgeting and forecasting, including detailed revenue, headcount, and capital planning
  • Financial and management reporting
  • Strategy management via project planning, dashboards, and balanced scorecards

Learn more about how agile and scalable FP&A can help your business using the video below:

Bringing it All Together

Wouldn’t it be even nicer if these two solutions worked together effectively, integrating automatically and allowing you to make financial decisions faster? They do.

With Intacct and Host Analytics, you have access to two of the most advanced cloud solutions for financial management as well as long-term budgeting, planning, and strategy. Learn more about the two products, and contact Brittenford Systems to learn more.

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