Financial Planning and Analysis – Two Hindrances
Whether you call it “financial planning and control” or “financial planning and analysis” , it is a necessary function for any business to operate successfully. Through analysis of financial data and market conditions, decisions can be made with a certain level of confidence. But the work involved to make that decision can be intense. The undertaking of FP&A can intimidate even the most experienced business specialists. But the intimidation boils down to two major hindrances that can be addressed to simplify the task.
Infrequent forecasting and planning giving inaccurate views
What if the local weatherman/weatherwoman gave only a quarterly forecast, rather than giving a glimpse for the coming day each evening? Here in Texas, few would have predicted the rare winter storm we faced in February. And we probably would not have expected the mid-seventies we are experiencing now in May.
Your business needs more than a quarterly or even monthly session of forecasting and planning. When planning and forecasting isn’t happening continuously, its difficult to adjust to changes in the market. For successful day to day planning, it is important to define your objectives.
With a well-defined objective, analysis and strategy development becomes an easier and more efficient task. While the initial move from quarterly or monthly seems daunting, the result is well worth the investment of time.
Inflexible systems and processes bogging down the FP&A
Thinking back to your local weatherman/weatherwoman, what if they had to compile their forecast from computer systems that didn’t work together? And What if the only output from those systems were only in a spreadsheet?
This day-to-day planning requires a flexible system. Something more robust, agile, and user driven than Excel. For effective Financial Planning and Analysis, your business needs a customizable system.
You should seek a system that can standardize your processes, combining data from each of your corporate divisions and providing a clear view of your status to everyone in need of that information. The creation of a system that seamlessly runs simulations, incorporates ever changing market information, and provides outputs in a timely manner can be revolutionary for a business.