No matter where you look today, many organizations were blindsided by the impact of the pandemic to their business. As we see many businesses close their doors permanently, it’s important to take a look at what steps can be done to better respond and weather such uncertainties.
In this article, we’ll focus on the importance of aligning your financial strategy and resources to survive business disruption.
Think Beyond Annual Budgets
Having a business plan is important to understand what success looks like and what it takes to achieve it. Once a plan is set, you need to look into the numbers to see if your plan will have the financial results that your business needs to thrive.
For your business to continue operating smoothly even amidst a crisis, your budget needs to be in sync with your strategic goals. It is crucial for businesses to be able to manage their financial resources so they are ready to face unexpected challenges that may come their way.
For example, learn to think beyond annual budgets for your financial strategy. Note that many businesses may not be able to rack up the numbers and perform as quickly as others. As a result, annual budget plans may not be as effective for every type of business.
Thinking about your budget in the long-term rather than annually helps ensure that your budget is aligned with your overall goals across the organization.
Be More Insights-Driven
The best strategies do not always have to come from one person or resource. In fact, when company executives are able to come together to share their insights, better strategies are formed for the good of the organization.
Every executive should understand how strategy and financial forecasting work together and need to understand the crucial role that both play to the success of the organization.
Misalignment happens when company goals and budgets are created separately by different entities. Both need to work together and should be in sync in order to implement the strategy successfully.
Track Your KPIs
More than creating and outlining what the budget is, tracking how successful it is is crucial in polishing how budgets are made in the future. Businesses can turn to financial planning and analysis software to track the health of their organization. The right financial software can help you track these crucial figures to prevent errors and other accounting gaffes.
This is why having the right key performance indicators help in measuring the success of your budget. KPIs can include both financial and non-financial parameters. All of these need to be well-defined and should be measurable. More importantly, these need to be passed on across the organization so everyone knows how to measure success and be aware of what they need to do to achieve it.
It is also important to ensure your goals are attainable. Take time to consider your internal and external environments and how the economy is tracking. When you factor how your organization is positioned as compared to your competitors, you can properly plan how to allocate your company assets and resources to be successful.
Adjust your strategy when needed
No strategy is ever fool-proof, especially amidst volatile markets. While we all understand the importance of setting realistic performance expectations, several companies still tend to get carried away and set targets and expectations without thinking about the volatile market conditions.
It’s important to review your plans quarterly and adjust them when needed. This helps identify any mistakes, so you can correct them before they become more difficult to manage.
Your organization’s financial health is crucial to the success of your company’s overall strategy.
Using Performance Canvas Financials to Align Your Strategy
Having an aligned financial strategy throughout the organization is crucial to survival in today’s times. It helps leaders create a clear path to success. With Performance Canvas Financials, organizations have a complete financial planning and analysis solution that can help them outline everything they need in implementing their financial strategy throughout a crisis.
If you’re looking for the right financial solution that can help you align your financial strategy with your organization’s goals, Performance Canvas is the right choice, helping company executives to lead with confidence and data-driven insights to win the game.