In our last blog post, we introduced four problem areas financial planners face. It was a challenging picture of the biggest issues impeding planning, budgeting and forecasting cycles. The good news is that changes can be made that will have an immediate impact. Over the next several blog entries, we’ll cover what we have identified as the Four Must-Haves for financial planning, tackling one at a time.
#1 – Define business needs and generate executive support
You may be asking yourself the questions, “Why bother improving planning, budgeting, and forecasting? It seems like huge undertaking, and will the impact be worth the effort?”
The answer is simple. Successful financial planning drives profitability through improvements to accuracy in budgets and forecasts and by highlighting areas where resources can be realigned and cost structures adjusted. Accountability is driven through transparency to business unit and department plans, forcing everyone to be on the same page. As well, there are significant gains in efficiency. Integrated systems increase the efficiency not only for those who are inputting the data, but those who are driving the planning process and need quick access to accurate data.
You many find your business executives asking the questions, “Why should we care?” Executives can often be overlooked beneficiaries of overhauling your planning process. While an overhaul will make life easier for you, it provides a huge value proposition for your business executives. Take for example your CEO, or business department head – planning systems can be an excellent tool for creating accountability. It can be leveraged to ensure that the company’s investment and business priorities are being funded appropriately. Public companies benefit from planning as a way to help ensure they are setting the right expectations for shareholders. This is done by driving financial scenarios which provide a better forward look at the business and help to determine what may or may not happen in the future.
If C-level exposure and business insight isn’t enough to convince you, check out our next blog post covering the 2nd Must-Have, Process Improvements.
Other Posts in this series: