What if I told you that a modern approach to budget planning would leave you omniscient about the state of your budgets and business at any given time? You’re skeptical. I get it! Financial teams have been promised planning bliss before – only to be stuck with a cumbersome IT nightmare, and mountains of spreadsheets. I promise you, achieving planning nirvana is not as complicated as you might think. Powerful financial technology of today tightly integrates your ERP systems with easy-to-use online workspaces that can be accessed anytime, anywhere.  Such technology will undoubtedly transform your tomorrows by saving your organization time, money, and stress.  You will be able to react to changes in budgets now, versus months down the line. I know, I know, it sounds too good to be true. But, I’ll tell you in just four bullets what you need to know for better planning tomorrow. Hold on tight, you forward-thinking financial leader. We’re about to dive in.

Avoid Planning Paralysis

It’s easy to be in denial about how costly bad planning can be. The planning process involves multiple stakeholders well beyond Finance, and relies on countless revisions and executive buy-in. It often takes 3-6 months to complete a budget (and by then, the data is so old, who knows if it is still relevant?).  

Not convinced? Check out my handy-dandy planning process cost calculator for a baseline snapshot of how much money your company is spending on old-school annual budgeting and planning (p.s. I made this myself).  The salary and time your organization is wasting may make your jaw drop. And this is just the tip of the iceberg – it doesn’t take into account other “hidden” costs of bad planning that arise when you make a mistake, or fail to act quickly on an opportunity in the market or a problem with a key customer or supplier.

Curb Your Excel Addiction

Excel continues to be a terrible crutch for planning and budgeting. In this recent video with our ERP implementation partner, I talk about best practices for budgeting in Excel. Newsflash! There are none. (Sorry for the spoiler. Please still check out the video.) The honest truth is that Excel is being outright abused.  Don’t get me wrong – Excel is fantastic for certain functions; just not for planning and budgeting. Sadly, the advances in ERP have made some companies even more dependent on Excel for exporting data, and Excel was never intended as a tool for supporting real-time business decisions.  The shortcomings of Excel are adding to the costs of your planning process – beyond the sheer manpower hours you discovered in the calculator. Think of the administrative burden of Excel – time spent formatting between spreadsheets, checking and rechecking for accuracy, and ad hoc reporting.

One of my favorite stats by KPMG states that only 47% of executives have confidence in the reliability of their financial information. Personally, I can’t blame them considering how their reports and data have likely been handled. All that information manually bounced around from spreadsheet to spreadsheet and then manipulated beyond recognition – how tragic! How many times has your Finance team been derailed for several days when there’s a question about a data point in a spreadsheet that no one can answer or reconcile? The wasted productivity is enormous and the process is downright appalling.

So what are savvy financial leaders like you doing to fight this financial planning addiction? Saying “no!” That’s right. The smart guys are outright saying no to piles of spreadsheets scattered across their organization (and all the version control and data integrity issues that accompany it). You simply cannot be an agile organization if you are dependent on a static document requiring manual manipulation. The finance organizations of tomorrow will not allow it. And neither will I. Thankfully, today there are powerful financial technology tools that are easy to implement and use, and that let you visualize your data in real time from any device. More on this topic in the video (You’ll see, I didn’t spoil the whole thing).

Build Bridges Between Departments

Business alignment is not a new concept, but technology has evolved to where it can serve as a powerful catalyst to bring disparate groups together and quickly break down budgeting silos. When technology is simple for all parties, barriers melt away. Suddenly, it’s not just a handful of IT or developer-savvy employees who can quickly access and activate the technology. Good technology fosters collaboration and empowers decision making and problem solving.  Modern financial planning allows all stakeholders to participate in forecasting and be accountable for their projections. Armed with real-time data of actuals and budgets, business leaders are empowered to adjust strategies so they can succeed.  

Some ERP systems and financial tools are just too clunky and not user-friendly – which makes adoption across the organization a struggle. Successful companies are implementing solutions like Hubble (yes, a shameless plug, but an honest one) that allow you to build centralized user-managed forms for business drivers. This type of technology allows Finance to monitor productivity from different data sources like CRM, manufacturing, and a whole slew of connected infrastructures.  Cloud-based, intuitive applications allow your sales team to upload data from the field on a mobile device – and connect it back to Finance – helping everyone drive the business forward.

Continuous Planning and Forecasting

Planning should not be a one-time, labor-intensive event. It should be dynamic, agile and evolutionary – OH MY! It should be based on current data and incorporate actual market fluctuations – not what was forecasted weeks or months ago.  Likewise, Finance should not be crunching numbers solely at the end of the month from field reports. By then, it’s too late for business leaders to address what might be happening in the organization. A key part of continuous planning is a system supported by automation.  Automation alerts employees to daily business changes that require action. This transparency prompts stakeholders to communicate and jump on opportunities or problems that may be surfacing – without wasting time.  Modern planning technology as discussed further in this video can perform complex models but present them in easy-to-digest data visuals, so everyone has a clear snapshot of actuals and budgets. This is what drives a high performance organization.  

To wrap this up, modern financial planning not only gives companies a competitive edge, it also lifts the yoke off your Finance team. In a perfect scenario, Finance should be a knowledgeable advisor to the organization – not a data entry workhorse who spends too much time formatting, reconciling, and proofreading.  Bringing best-of-breed tools to your company is also a powerful recruiting and retention mechanism for the brightest employees coming into the workforce. Employees are insisting that their work technology be intuitive, seamless and quite frankly, pretty, just like their favorite consumer applications. Planning does not have to be cumbersome burden. It’s time to see the future of financial planning.

Until next time,

Jon Louvar


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