How companywide financial planning and analysis works on a BI platform

Every business owner understands the importance — and pitfalls — of financial planning and analysis (FP&A). For some mid-market businesses, the process of generating the most up-to-date numbers that reflect an accurate view of your business hasn’t changed much.

Usually, a business’s finance team is the go-to group of professionals who have a system in place; some businesses may have already started to move toward digitalization, while others aren’t so quick to abandon all of their spreadsheets.

Extended companywide financial planning and analysis

FP&A has always been an essential business requirement of most companies’ finance teams. In particular, large enterprises have the resources to devote much attention and time to forecasting for changes in demand as well as planning for the future. Many have invested in software to complete these tasks. Today, bringing FP&A to mid-market businesses has caught up. FP&A is not only a logical, low-cost solution but with modern companywide financial planning software built on a BI platform, it’s also easy.

For the majority of mid-market companies, the FP&A solution currently in use involves little more than the company’s enterprise resource planning (ERP), spreadsheets (often with complex models), maybe some business intelligence (BI) analysis, and collaboration with the business via email.

However, staying competitive, maximizing your resources, and providing your team with the business intelligence needed to succeed requires business owners to demand more from their software. Today, business owners are keenly aware that what they need most from their forecasting and budgeting tool is real-time, actionable intelligence.

Consider the impact business intelligence could have as businesses migrate to all-digital, hybrid and even fully remote, work environments. Some business owners are already finding themselves confronting a new need to move beyond basic FP&A.

Last year, research firm Gartner coined the term “extended planning and analysis,” or xP&A. Simply put, xP&A is a best practice that ensures your budget numbers offer business intelligence utilized beyond your business’s finance department. According to Gartner, by 2024, 70% of all new financial planning and analysis projects will become extended planning and analysis projects.

Moving your financial planning and analysis process from static spreadsheet-based reporting to a platform that generates business intelligence can empower staff across all divisions and at all staff levels to collaborate using shared, up-to-date knowledge toward a common goal: discovering new sources of profit.

Here are four reasons for mid-market businesses to put a new focus on financial planning and analysis and elevate your process with a new solution that produces actionable, companywide intelligence:

1. Your business and its requirements are more complex

Spreadsheets may no longer be the best answer to your financial planning and analysis challenges. Your financial team may have its own spreadsheet-based system in place for managing financial planning, budgeting, modeling, and performance reporting.

Chances are your spreadsheets only make sense to your finance team; other departments may not have the skillset or time to labor over numbers searching for specific figures. An accessible, inclusive business intelligence platform can become a valuable resource across your entire business, especially as businesses worldwide are restructuring to accommodate a new normal brought about by the Covid-19 pandemic.

2. Valuable opportunities might be hidden in your financial and operational data

Unearthing valuable companywide intelligence requires a team commitment to data discovery, the process of collecting data from various sources and consolidating it into a single source such as an intuitive business intelligence platform.

For example, your team may be collecting operational data such as inventory by hand and inputting it into a spreadsheet rather than pulling it directly from your ERP and analyzing this data with the help of a modern business intelligence platform.

3. Market volatility means accurate reforecasting requires a real-time solution

Making sense of fluctuating markets and how market changes will impact your business requires real-time data.

In the Phocas FPA tool a user can use the budget workflow and worksheet to simply re-forecast estimates during the budget period or prepare a rolling forecast which will form the basis of the next year’s budget. You can prepare your forecasts easily, by bringing in current year actuals to-date and revising budget assumptions. You can also model different scenarios to determine the impact on the financial position according to each scenario.

4. A clear picture of your cashflow will ensure current and future profitability

Understanding your business’ cashflow should go beyond interpreting monthly spreadsheets. A cashflow statement should be a resource customized to the needs of your business. With the help of a financial planning and analysis solution that reveals the true financial health of your enterprise by providing a new level of detail, your entire team will be fully equipped to understand the business landscape and strategize how to best meet new challenges.

Regardless of your specific industry, the right business intelligence solution will take your financial planning data beyond spreadsheet numbersModern BI increases visibility across financial and operational data so your financial team can forecast across the whole business, plan scenarios for future employee headcount, and budget collaboratively.

To learn more about how Phocas can support your financial planning and analysis, download this ebook: Modern Financial Planning and Analysis.