If there is one thing that 2017 has taught us – it is that the demand for finance departments to provide valuable analytic support to the organization is increasing.
The role of finance departments has drastically evolved over the years. They no longer are just the computing sector of an organization, they are now considered business partners.
As business partners, finance departments are expected to provide timely, insightful, and actionable information to the decision makers of the organization. They are to help the leaders strategically steer the company forward by making sure each decision taken is well founded.
CFOs feel the burden of this new responsibility as business partners more than anyone. In fact, last year most CFOs we have spoken to has admitted that requests/demands come from all sides of the organization that they are struggling to keep up with them.
They are scrambling for ways to please everyone by fulfilling their requests/demands on time that the FP&A teams exhibit signs of exhaustion and frustration.
So this 2018, just how do you improve financial planning & analysis within the finance department?
Here are the top 3 tips to improve financial planning and analysis.
- Know when to provide in-depth support
With the roles and responsibilities of the FP&A team constantly extending, many members of the FP&A team feel a bit uncertain what it is they are really expected to do and what it is they don´t have to do.
A CFO we spoke to last year once quipped ”We barely get our head out of the water these days because my team just can´t say NO.”
True enough, finance analysts struggle with declining requests from different departments/people. However, it is very important that the FP&A team learn to set boundaries and find a middle ground.
It is important for FP&A teams to have an established set of criteria that will help them know whether or not an in-depth analytic support is to be given. Having this criteria in place will make sure the most important and business impacting analytic requests are prioritized and that they don´t waste time providing analysis that will add very little value to the organization.
- Partner with Business Units of other Departments when it comes to Analysis
As in any medium to large sized organizations, knowing exactly what type of analysis are done by business units is so difficult. After all, how is a finance department supposed to know what is going on in other departments when they are swamped with their own workload?
However, it is very easy to duplicate analysis. It is very common that business units have done their own analysis and the finance department would also try to do their own analysis. This leads to duplication of work and a complete waste of time for one of them.
Therefore, it is advisable to partner with business units and plan a joint analytic exercise with them so that each department can use their inherent strengths and combine them so they can produce a reliable output together.
For example, marketing departments or sales departments usually do their own analysis in order to forecast or to improve operations so why not create a join analytic exercise with them that will add significant value to the business and remove duplication of analytic efforts?
- Automate and Centralize
Getting CFOs to invest in automation of certain tasks is not difficult because they are aware of the return of investment. Further, it also helps if the analytic portion of the decision making support is centralized because not only will you make better use of your internal talent, the overall efficiency of the team and the level of analysis that will be made will be deeper and more superior.
There are several ways to address concerns of loss of control and business acumen because the ”right” automation technology will make sure there are best practices in place to avoid the common pitfalls of automation and centralization.
What would you like to do next?