By Robert Gothan, CEO and Founder, Accountagility
Like it or not, firms of all shapes and sizes need to conduct business and financial planning on a regular basis, which can often mean trawling through spreadsheet after spreadsheet of financial data in order to plan effectively. As a result, this process of data acquisition, validation, number crunching and reporting can be a significant drain on resources.
These processes can be particularly challenging when you consider the multiple data sources and countless structural and numerical changes that occur in the planning lifecycle. This high level of complexity not only increases process risk, but also makes it difficult to track manual changes and compare and merge different versions of the plan.
How firms approach the planning process is therefore of great importance, as examining how data is analysed, managed and presented can be instrumental in cutting costs, increasing efficiency, and getting the best business insight possible.
Streamlining planning data
Firms need to start by bringing together their various data sets in an integrated way, so that the entire plan can be computed within a single process. With no split between Income and Expense Planning, for example, resources can be freed up to focus on strategic analysis, rather than plan preparation. A more integrated approach to data management will also allow for quicker identification of bottlenecks within the business, which can subsequently be addressed in order to improve productivity.
Having a clear understanding of key performance indicators is also vital. However, systems can often oversimplify metrics, and therefore reduce the flexibility of your data and its ability to give insights that are useful for planning. In order to properly visualise KPIs, it is essential to implement a system that can analyse any data attribute. This way, current performance can be effectively analysed and historical trends can be picked out, ensuring that future projections are as accurate as possible.
The reintegration of the business insight gained from data analysis is fundamental to the success of the planning process. This is why the speed with which different parts of the plan can be created and analysed is so important. However, firms must remain flexible in how they interrogate their data, and in how they apply the insights gained.
Taking a more strategic approach to your financial planning processes will also help to encourage more critical thought around what the numbers actually mean. Strengthening these processes will not only reduce the risk and inconsistencies caused by manual spreadsheet changes, but will also promote better communication across the businesses, as plans will be automatically merged. Firms that adopt this approach to their planning process will therefore be on the road towards cutting costs and increasing efficiency – and gaining a better view of their business as a whole.