How to Give Finance the Structure it Needs While Maintaining Business Agility

Business and financial planning has historically been a static, periodic process. Yet the business environment is one of constant change. It doesn’t sound like the best way to run your organization nor have complete confidence in your plan, right? With change being a constant influence on your business, and with planning season in full swing, the time is now to rethink your planning process.

This is the second in a three-part series examining the financial planning process and proposing a better, more agile, and more continuous approach to planning. The first part explored the benefits of Continuous Planning – a new paradigm for planning and decision-making. Next, we’ll explore the two components that comprise Continuous Planning – Structured and Dynamic Planning. These concepts acknowledge the fact that while planning is a constant and company-wide effort, there are two fundamental groups of people who participate in the planning process in different ways, and with different needs. The first group is Finance. Finance is oriented around a paradigm of Structured Planning. Let’s take a closer look.

Finance is Structured

The function of finance is inherently structured. There are debits and credits, revenues and expenses, P&L’s and balance sheets, all in a world of rows and columns. Finance needs to conform to the structured demands of standardized financial reporting requirements and regulations. It’s also responsible for keeping the business in compliance with the internal structure of fiscal periods, general ledger categories, and other business categorizations of financial data.

That structure doesn’t always mesh well with the demands of the business. Different business functions plan and operate in different ways. Yet financial compliance standards must be met. Finance has to balance its own structured requirements while simultaneously extending the financial conversation to the rest of the business. Why? Because Continuous Planning doesn’t happen in a vacuum. Finance relies on input and collaboration from business users to build accurate financial plans and conduct meaningful analysis.

Automate Your Financial Data

While financial planning & reporting need to conform to a certain structure, the systems housing the required data are decidedly not. Your current systems are likely a collection of software applications deployed over decades, sourced from different vendors, and likely designed to accomplish single objectives, most of which were probably unrelated to finance. When data is manually downloaded, and cut, pasted and copied into spreadsheets, the chance of an error is always present. This undermines confidence in the financial data from the beginning.

In addition to that, Finance is being asked to evolve into a more strategic, data-driven source of insights for the business, but inefficient systems and processes make it difficult to deliver on that promise. That’s because these inefficiencies cost finance hundreds of hours each month in laborious, time-intensive manual activities. That’s real time, money, and effort that could be redirected to more strategic activities.

Continuous Planning platforms integrate with your source systems and automatically collect and organize data into a single source of financial truth. And because it’s in the cloud, it’s accessible by anyone from anywhere, instilling confidence that the data is always current and accurate. This saves time and effort, and eliminates the risk and fear of incorrect or outdated numbers.

Ease the Production of Financial Plans and Reports

Finance’s primary outputs are standardized financial plans and reports. They are required at regular intervals and take huge amounts of time to prepare manually. And that’s after the time taken to collect, aggregate, and validate the data required to build those plans and reports.

These financial outputs come with their requisite accounting categorizations and rules. And that’s a long, technical list. This structure is a necessary part of the process, yet trying to organize financial data by hand is a laborious and inherently error-prone activity.

Continuous Planning platforms like Host Analytics provide prebuilt planning and reporting functionality, and built-in financial intelligence that automatically stores and categorizes data based on accounting properties and rules so data is always presented in the way that finance professionals expect. They provide finance with the structure needed to plan and report with speed and confidence.

Increase Confidence in Strategic Insights

Automation and integration via a Continuous Planning platform eliminate much of the manual workload on finance while increasing the accuracy of their work and the confidence in the results. Their structured plans and reports are easier to create and adjust, automatically formatted, and consistent in their presentation. All things finance dreams about.

But we can’t forget about the demands of the business. Business leaders need real-time access to data and plans to understand what’s going on in their business and what to do next. They need to evaluate current performance, explore new ideas, model different business scenarios, and assess potential options on how to move forward. And to do all that, they need accurate data as soon as it’s available. So, the faster finance can finalize actuals, produce structured financial plans and reports, and deliver that information to business users in a format that is meaningful and collaborative, the better decisions business leaders can make to guide the company forward. 

Faster, more continuous planning, analysis, and decision-making positions finance as the strategic center of the business. Leaders across the organization turn to them for answers to the most critical strategic questions.

A Platform for Finance

Finance needs real-time access to comprehensive business data to do their job well. At the core, finance is required to output the structured plans and reports needed to fulfill the financial regulatory and compliance obligations of the business. It’s non-negotiable. Continuous Planning cloud platforms help them do that faster, easier, and at greater frequency. 

But finance is also responsible for helping the business make better decisions with more confidence. That same structured data is the foundation, but it loses its impact if finance doesn’t have the time or tools to help business users analyze their own performance, explore different options, and plan in a way that will optimize their results.  

In our next and final segment of this three-part series, we’re going to explore the Dynamic Planning side of the house, and how business users in the field experience the planning process in a very different, albeit related, way. Stay tuned! 

Related Posts

Planning
A Platform for Every Dynamic Plan Your Business Needs

Learn about the importance of dynamic planning and the financial planning platform you need to meet the needs of your dynamic business...

Read More
Planning
Business is Continuous, So Why Isn’t Planning?

Continuous planning builds frequent cycles of planning, analysis, and refinement into your business. Check out our latest blog to learn more...

Read More
Planning
As Businesses Continue to Move Faster, Finance is Running Out of Time

The planning process is due for an update. The ability to plan, execute, and analyze in a continuous cycle is what executives need for a dynamic business landscape...

Read More