Nailing your financial planning: The 2023 priority that will help in navigating the turbulence ahead

Gavin Fallon, General Manager – UK at Intelligent Planning leader, Board

 

Global conflicts, high inflation and extreme weather is only the highlight reel of the disruption finance leaders are facing in 2023. Retailers are seeing investors clinch their pennies. Supply chain is at the junction of an unstable economy and a shifting global landscape. In turn, finance leaders are seeing an economic environment nearly as demanding as at the start of the pandemic and need efficient support in navigating the challenging landscape.

 

Predicting the unpredictable

The effect of this perfect storm on businesses is the struggle to predict customer activity and financial resources. This is primarily because inaccurate forecasts discourage investors – not reaching predicted earnings targets and over or underspending can reduce trust and cause slower reactivity when economic troubles hit. As well, FP&A determines cost cuts and layoffs that can be detrimental to a company’s health and financial wellbeing. Business leaders will find themselves in a shrink mindset if they can’t accurately predict the changes that need to be made, or, alternatively, not make drastic changes unless necessary.

An insecure economy makes FP&A simultaneously more essential and more difficult. Enterprises are also shifting their geographic perspective, altering investments to align with countries in financial trouble and global tensions.

The control and planning of budgets has never been more essential in predicting challenges, mitigating the consequences, and still striving for growth. Planning across industries is key for finance leaders to judge the distribution of resources with little waste. Many companies are stuck in the dark ages of spreadsheets – with the increase of data available, manual planning is not efficient nor accurate enough to act and react.

 

The challenges with transformation

The pressure on finance teams is particularly high because they are responsible for adapting to disruptive events and ongoing trends. Financial planning and analysis (FP&A) strategy plays a vital role in determining a company’s financial health and pointing toward adjustments.

However, traditional FP&A is stunting organisational growth. Time and effort is wasted in calendar creation and monthly planning that eats into the time it plans. Teams are uncoordinated and planning documents are out of date, causing a backlog nightmare.

And this is just to keep up with real-time capabilities – predictive planning is another beast entirely. For many enterprises, the transition to digital processes seems daunting. There are too little resources, too many vendors to consider and constantly evolving data strategies.

This can cause stagnancy in companies’ progress and growth, which they can’t afford in the economic environment they’re faced with today. Companies need technology that makes them quick, flexible, and keeps them in that growth mindset.

 

Turning to technology

When we’re faced with unprecedented struggles in an economic recession, we should use existing tools to our advantage. A phrase we’re all going to tire of hearing this year is: ‘how do we do more with less?’ According to McKinsey research from June 2022, almost 70 percent of top economic performers versus only half of their peers are using technology to surpass their competitors.

Intelligent FP&A technology allows teams across an organisation to work in complete collaboration, teams contributing their share of knowledge to one cohesive platform. Sales and revenue information, warehouse-to-floor management and team coordination all become one, single automated process.

In addition, companies don’t lose precious resources to endless administrative tasks – such as updating spreadsheets. The most effective FP&A platforms produce real-time updates and have the structural capacity to predict challenges ahead.

This level of automation involves much more integration than the original approach of attaching a FP&A system to the side of existing workflows. FP&A technology should underpin the entire organisation, establishing planning from the forefront of its work. Planning across budgeting and daily processes will lend itself to more accurate and timely decision-making, keeping a company competitive through this challenging climate.

 

Approaching the world of intelligence

AI solutions can sound intimidating to enterprises used to more traditional methods. However, planning can give organisations unfathomable strength and adaptability in their FP&A structure. Intelligent planning not only predicts cross-sector challenges and aids in mitigation, but it maintains growth as a goal.

Business leaders should go back to doing the best leadership work they’re hired to do. Their time and value are less likely to be wasted if an automated platform is aiding them with informed, comprehensive decision-making. Intelligent FP&A solutions drive accountability and efficacy, leading financial teams to clear goals and strategic objectives. The forecasting process leads directly to the evaluation process, and decisions can be evaluated holistically.

Intelligent financial planning & analysis technology can be used to save businesses in 2023 and make them competitive in an economy that doesn’t typically foster growth. The transformation is key against the backdrop of disruption.

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