Companies are constantly looking for ways to improve their financial planning and analysis. Still, despite developments and new tech, very few companies use zero-based budgeting or pure beyond-budgeting techniques.
In most cases, companies are still doing one-year or five-year budget planning or strategic planning.
We can’t forget about the numbers in the bank. To get at the true story behind the numbers, it is necessary to examine financial and non-financial data. What aspects of your procedures support what you should be doing, or are you one of the FP&A departments that has to “stop doing foolish stuff”?
The fact is that most finance and accounting departments have a significant amount of change ahead of them in terms of process improvement, and perhaps more importantly, process development. What exactly is meant by the term “process creation”?
You will need to do many things in the future that you are not doing now, and you will need to develop procedures to facilitate this.
What You Can Do
As a trusted advisor to the business, FP&A must offer value and provide an unbiased performance assessment. The FP&A department is vital and must be streamlined to produce value.
With this approach, think about FP&A procedures from a fresh perspective or shift your FP&A department from ‘Reporting to Driving’ and into the business leadership table.
Learn the business concept, drivers, goals, KPIs, and finances. This can help you better analyze and explain performance and help you become a trusted counsel.
Ask frank questions about performance and how to improve.
Establish trends/analysis based on data (facts) to influence decisions. Develop an integrated budgeting and forecasting process to go from data collection to insights and analysis.
Focus your efforts and analysis on the business’s pain issues. Keep analysis and insights simple for company executives.
More agile, more innovative competitors will overtake companies that do not learn from their mistakes. An organization’s capacity to understand and respond quickly is the ultimate competitive edge.
Nothing better describes FP&A’s fundamental goal towards the business. The finance department is ideally positioned to promote an outcome-based organizational strategy.
Here are a few tips worth noting.
- FP&A should focus on essential measures rather than numbers.
- Always look to the future
- Encourage fact-based decision-making
- Be a problem solver at heart
- Discern between essential and irrelevant data.
- Track strategy progress and challenge the business.
- The FP&A department must invest in technology, people, and reporting processes to thrive. A core reporting team inside FP&A can automate standard reporting.
Developing the right framework
The methodology struck the target to alter FP&A procedures to enable the CFO to achieve his departmental goals. In practice, you’ll need to dig further into your processes and maybe utilize some of the more classic process transformation technologies.
Is this framework helping you alter FP&A?
The decision-making process may be improved in every organization. A framework defines how and when to proceed through the stages.
Review each stage in order, even if you don’t think it’s applicable right now. With proper foundation adjustments, you may get spectacular results.
The Performance Canvas Solution
Organizations must now more than ever create an agile environment where they can adapt, predict, and respond quickly and effectively.
Having a business intelligence tool and financial planning software in one platform like Performance Canvas may help you become a more flexible firm.
To reach corporate goals faster, Performance Canvas gives users access to reliable data and accessible tools. Performance Canvas also allows you to track financial and operational KPIs quickly.
Book a free PCF demo with our experts now to discover whether it’s the perfect tool for you.