Financial planning for the fiscal year is one of the most important business growth strategies. It is a growth strategy that pierces through the entire business as it goes through tracking and recording of a company´s revenue, expenses, debts, and capital forecasts for the preparation of the fiscal budget.
In the ideal world, a company should be able to do all these tasks in a span of 5-15 days depending on business size and complexity. We say “ideal” because this isn´t the case today for many. The budgeting process drags on for weeks and months that somehow the output of this exercise offers little value at the time of conclusion.
Budgeting takes longer and is very error-prone and labor-intensive than most companies would want to admit. There is no shortage of articles online that talks about all the common issues of budgeting and planning. If you are reading this article, we will guess that it is because you know all these problems and you need no reminder of all these pains. Instead, you are looking for useful tips that you can take with you to improve the way you execute your corporate financial planning today.
So, we won´t disappoint. Here are the top 5 useful tips on how to improve your fiscal year financial planning.
- Evaluate your current financial planning process, identify bottlenecks, and look at how long it takes to complete a budget cycle
- The firs step to improving financial planning is to always look at how you currently do things. The urge to try and improve comes from a current pain you experience or a room for improvement you have consciously or unconsciously identified. Look at that, list everything that hinders your budgeting process from being prompt and effective and then count the number of days or weeks or months it takes for you to complete a budget cycle.
These are important things to look at because knowing where you currently are will give you a good idea of where you´d like to be. For example, if you know that it takes about seven months to close an entire budgeting cycle for your organization, then you can aim for cutting that down to half.
- Eliminate manual, repetitive tasks through intelligent automation
- It is such a shame to see talented, smart, high performing, and analytical staff do more trivial things like verifying numbers and fixing errors than actually doing high value yielding tasks.
If you see tasks in your current budgeting process that is currently labor-intensive, repetitive, and error-prone, try to eliminate those by intelligent automation. We want to stress the fact that beginning the process with automation before properly identifying obstacles is a wrong approach because automation only makes things faster, not better. Therefore, follow the first step in this article and make sure you don´t just automate but you intelligently automate. Intelligent automation makes a whale of a difference than just automation.
- Connect your data sources through 1 centralized budgeting tool
- A very common problem for organizations especially mid-sized to large ones is the fact that they have too many disparate systems running in parallel with each system holding different critical aspects of the budgeting process. If you find yourself in this position, find a financial budgeting and planning software that can connect to most if not all of your disparate data sources. If you are unsure which ones can do this – you can begin by evaluating Performance Canvas Financials which you can read more about at performancecanvas.com.
- List down your wish list for how you envision your budget process
- Every CFO or finance manager or FP&A staff envisions an effective budgeting process that makes monitoring, tracking, recording, and analyzing financial and non-financial information faster, easier, and more real-time. You only need to list that down and lay out what you want as this will help you find the right help or the right financial planning technology that is most suitable to your business needs.
One you have done that, identify your mandatory requirements for the new technology and the nice to have ones because the truth is that you won´t get all that you wish for, so you just need to know which ones are must-haves.
- Move your financial planning to the cloud
- The cloud is the future and perhaps the only way forward at a certain point in time so this early, consider that. Understandably, some are not ready to move things to the cloud, and that´s ok but remember that cloud financial budgeting and planning tools today have improved dramatically over the last couple of years. There are now certain security certifications like AICPA SOC2 that you can request from budgeting software vendors or if you are worried about where your data is stored, you can always ask them what their hosting provider is and which country your data will be stored.
Many capable software vendors have addressed all the previous concerns of cloud budgeting. To add to that, the costs of implementing a cloud budgeting solution is a lot lower than an on premise one plus maintenance will be easier and timely.
What would you like to do next?