Making the Shift: Four Secrets Behind Great Budgeting and Planning
CFOs’ responsibilities are higher than ever before. When it comes to developing FP&A strategies and overseeing execution, setting targets and allocating resources is just not enough.
So, how can CFOs take advantage of the new technology and methodologies available today? Here are the key steps to ensure that the budgeting and planning process becomes an opportunity, rather than a challenge.
According to Making the Shift: Four Secrets Behind Great Budgeting and Planning, an eBook by CFO Magazine and our partners at Adaptive Insights, the four secrets to realizing these opportunities, while taking advantage of new tools and methodologies are:
1. Challenge the Status Quo
According to CFO Magazine, you must create a new model that you can use to question stale numbers and reinvigorate budget discussions. In other words, looking at past years is key, but CFOs must avoid getting stuck with the same budget numbers every year.
2. Set Targets for Continuous Improvement
As the eBook states, budgeting and planning are critical exercises that require careful consideration and strong judgment. With the right tools, however, understanding every variable to mitigate risk and make informed decisions becomes easier and requires less time and effort.
Additionally, modern methodologies encourage better planning and analysis, which help decrease the margin of error.
3. Finance’s Work is Never Done
Setting goals for budgeting and planning through key performance indicators (KPIs) is only half the battle. The other half? Maintaining these goals in mind all year, shining a light on performance, deciding whether to change course and controlling pressure from managers and investors.
“Staying on plan is hard work, but CFOs sit in an excellent spot to deliver strategic value by helping the entire leadership team stay focused on the plan all year. By setting the drumbeat for plan review meetings, by formally readdressing the plan at midyear, and by helping to keep the pressure on, CFOs can drive both top and bottom lines.”
4. Rolling Forecasts Can Get You Out of Your FP&A Rut
Finance executives are required to allocate much of their time to managerial duties, like comparing performance against targets. This leads to having less time to truly understand the driving forces behind their budgeting issues.
Rolling forecasts allow organizations to better align with their strategy. Companies must perform more effective business analysis, and derive greater value from their budgeting and planning process.
Are you ready to make the shift? Contact us at info@innovergent.com to find out how we can help your organization implement Adaptive Insights’ rolling forecasts solutions.
