A well-established FP&A process is critical to effectively running a business. Yet, many financials run into challenges that prevent them from getting optimal value from their FP&A processes. Want to know which 5 challenges these are? And how to overcome them using Anaplan as a true co-pilot? Then read on!
Financial planning and analysis (FP&A) involve the planning, forecasting, budgeting and analytical activities that provide insight into the overall financial health of a company. With a FP&A solution, financials can combine financial, operational and external data (such as market trends) in one place to support key decisions.
What is the added value of FP&A?
FP&A goes beyond accounting and classic financial reporting. Periodic reporting of basic financial data is mandatory for all companies from the applicable laws and regulations. However, financial reports give a very general picture of your company’s financial situation and are focused on the past.
As a controller, do you want to go deeper and more specific into the financial status of your company? Do you want to spot positive and negative trends that influence the general financial health on time? And would you like to be able, as a real co-pilot, to make valuable recommendations to improve business strategies in the future? A well-designed FP&A process makes that possible!
What challenges are there within FP&A?
FP&A is becoming increasingly important for effectively running a business. Yet most financials face many challenges that prevent them from getting the most out of their FP&A processes:
1. Manual reporting takes a lot of time
Financial professionals often spend too much time manually sorting out and sorting data. A shame because it would be much more efficient to spend this time analyzing the data! Based on those analyses, you as a controller can gain meaningful insights in time to implement crucial adjustments within the business strategies.
2. Disconnected systems and processes
According to Ventana Research, 77% of planning processes depend on having access to accurate data from all segments within an organization. Therefore, integrating the different planning processes is of great importance. However, this integration can be challenging, as it often leads to significant differences in structures, systems used, and processes applied. This lack of consistency can create complexity that can hinder the making of effective management decisions.
3. Inaccurate budgeting and forecasting
A common problem that financials face is the poor quality of available data. Spreadsheets are shared with many different people and teams, and, over time, multiple versions exist that can differ significantly from the first, actual source of truth. Spreadsheets cannot support an infinite number of calculations. Thus, when spreadsheets are tinkered with too much, modelling becomes more complex and unreliable. In this way, collecting and consolidating all the necessary data becomes a time-consuming and error-prone task, resulting in less accurate insights.
4. Lack of real-time information
Real-time reporting provides constant insight into which revenue streams are underperforming and how you can improve operational efficiency. For example, real-time information allows you to predict the workforce needed for a particular task accurately. This strategic form of Workforce Planning can save a company a tremendous amount of personnel costs. Are there any changes in the real-time information? Then you can immediately adjust your plans accordingly. Many companies do not have real-time data. As a result, they lack up-to-date data, which makes
5. Lack of collaboration
Finally, obstacles can arise within FP&A if there is no effective collaboration between different silos. For example, is a marketing campaign launched that will generate a lot of demand? And has this not been communicated to customer service? The chances are that the call center will be overloaded, requiring last-minute hiring at a higher cost. Collaboration in FP&A ensures better visibility of plans, making it possible to make more accurate predictions and anticipate them better.
FP&A with Anaplan
Do you want to master all these challenges and streamline the entire process? Then Anaplan offers the solution! The ability to respond quickly to changing market conditions is more critical than ever. Traditional planning is often too slow. FP&A, with its flexible planning solution, connects data, people and plans within the organization. Optimize daily operations by making the planning cycle smarter, faster and more straightforward, and create insight and overview in financial analyses. In this way, you can help steer business performance better as a true co-pilot!
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