Financial Planning and Analysis (FP&A) is becoming increasingly important as more data becomes available, but there are still challenges to overcome. One of the main challenges is that decision-makers need to trust the underlying data.
Fremont, CA: Financial planning and analysis processes are often fragmented and need more input from operational areas, and spreadsheets are still the most commonly used tool. There has been no significant impact on spreadsheet usage despite technological advancements.
Financial Planning and Analysis Challenges
Disconnected Systems and Processes
Ventana Research found that 77% of planning processes depend on access to accurate and timely data from other parts of the organization. Cloud-based systems make integrating plans from different business areas easier, especially when dealing with disconnected spreadsheets.
Lack of Business Insights
CFOs face a common problem of poor data quality and the inability to transform it into critical insights. Spreadsheets are shared with many people and teams, making modeling difficult and unreliable. With a single source of truth, tracking down and consolidating all the necessary data is a smooth, manual, and error-prone exercise. Senior management cannot drill into business data and get actionable decision-making insights.
Manual Tasks Take Too Much Time
Finance professionals spend too much time on manual tasks such as account reconciliation and financial close and need help to reduce cycle time. Strategic duties like FP&A are essential to generate timely, meaningful insights, but finance teams spend too much time sorting and organizing data.
Inaccurate Budgeting and Forecasting
Cloud-based financial forecasting solutions can help collect and analyze data. Still, they need more consistency in systems and processes to accurately forecast economic outcomes.
Lack of Collaboration
Collaboration in FP&A ensures better visibility and more accurate forecasts across business functions, such as financial planning and cost optimization. It also enables companies to move from disparate, isolated forecasting activities to a unified, real-time enterprise forecasting process.
Lack of Real-Time Information
Business leaders need up-to-the-minute data, and finance teams are pressured to deliver actionable insights. Self-service analytics capabilities enable real-time reporting, allowing business leaders to understand revenue sources, improve operational efficiencies, analyze performance, and develop plans for driving growth. They can also adjust plans as needed.
