Do you work with traditional budgeting at a growing company where the financial planning processes are becoming increasingly complex? Then you’ve probably noticed quite a few flaws in the processes. In this article, I have summarised 10 simple key factors for how you can create a more value-adding and continuous planning process, that generates engagement and a higher level of ownership.  

    Before I started at Planacy, I worked as a controller at several different companies and as per tradition we always worked with Excel and made a couple of budget and forecast updates per year. Even though the budget is necessary to get a clear image of the business’s future, it was perceived by both me and the rest of my colleagues as rigid, slow and incredibly time-consuming – but it doesn’t have to be. It’s very common for the budget to be perceived as complicated that’s why the need for a more updated and continuous forecast continues to increase. Below I've listed 10 key factors on how to improve your financial processes.

    10 Key Factors That Improves Your Financial Planning

    1. Involve the Organization and Communicate Clearly

    All employees with insights in the business should be involved with the budget and forecast to create an engaging process with a high level of accountability. As you know, the financial budget and forecast affect all parts and aspects of the business. Therefore, transparency and continuous communication with everyone involved is of utmost importance throughout the process. Both strategic and short-term objectives should be made visible. 

    2. Work Driver-based

    Another important factor of increasing engagement is to work data-driven with concepts, KPIs and dimensions that everyone in the business is familiar with. In this way, it becomes clear to everyone what drives revenue and expenses and what impact it has on the business's results. Also, the quality of the input and ownership of the forecast increases when looking at key figures instead of accounts in the income statement. Therefore, it’s important to spend some time on identifying your key budget drivers and make input on that level. 

    3. Create Clear Frameworks and Goals

    As you all know, the purpose of a forecast is to predict the financial future of the business. Well-executed and reliable forecasts with clear frameworks and goals will not only help you make better business decisions, but also help you understand the impact of the decision. With a consistent driver-based process you can increase your employees understanding of the business which allows them to avoid guesswork and hypothetical assumptions. 

    If, on the other hand, there is a lack of clarity regarding what’s important, it becomes difficult to get a qualitative overview of your financial future. Then there’s a risk that the budget becomes political, so rather than creating a correct and realistic budget, a low budget is set so that you can easily surpass it. 

    4. Stop Focusing on Calendar Years

    Stop focusing on calendar years. Even if the board demands a budget, this doesn’t stop you from always looking 12, 15 or 18 months ahead, or even better – creating a rolling forecast with dynamic length. In this way, you always get a continuously updated outlook of the future. You’ll also reduce the effort required for each new forecast or budget. 

    Read more about opportunities (and problems) with rolling forecast

    5. The Budget Doesn’t Have All of the Answers

    Treating the budget as the correct outcome that you must live up to is not only inhibiting for the business, but directly counterproductive if you strive to be as successful as possible. The world around us is changing faster and faster which places high demands on businesses to be flexible and to be able to act quickly based on as current and correct data as possible. 

    Many companies are taking this all the way and implementing a continuous and dynamic planning process and goal management based on the Beyond Budgeting concept. 

    Read more about Beyond Budgeting – Continuous and dynamic targeting

    6. Work with Multiple Scenarios

    You can’t plan for everything, but you can have an idea or understanding of what’s most important. Constantly keeping this understanding up to date – taking external market trends or internal sales and delivery trends into account – contributes to your company getting better insights and thus creates better conditions for making good decisions. 

    Working with what-if assumptions (worst-case and best-case based on different assumptions and scenarios) to create the best possible foundation for decision-making, contributes to the financial forecast becoming a more powerful tool for operational performance management. 

    7. Take Advantage of the Data

    The data you as a business have access to grows exceptionally with each passing year – make sure to use it! Not only to be able to plan better but also to be able to make better decisions. By working data-driven with quality-assured data from your most important data sources (everything from the accounting system, time accounting, ERP, CRM and business intelligence platforms), you increase the understanding, quality of input and assumptions going forward. With quality assured data as a starting point you can use better distribution keys and algorithm calculations, and if you also have a system for financial and operational planning you’ll get automatic forecast proposals based on your data. 

    8. Minimise Administration

    When you have minimised manual errors and ensured good data and smooth integrations, the administrative time you invest in the process is also reduced. FP&A can then instead further contribute to increased engagement by supporting the business in how they need to think and act to achieve their goals. FP&A can spend more time on value-creating activities such as optimising the process, as well as analysing the budget and forecast in more detail to, based on the results, make as qualitative decisions as possible. 

    9. Increase the quality with automated reporting and follow-up

    For the budgeting and forecasting to be as qualitative as possible, you need to be able to analyse it in detail. Therefore, you should set up well-functioning analyses for both outcomes and forecasts with clear KPIs and objectives. By integrating your solution for budgeting, forecasting and planning with Excel, Google Sheets or a business intelligence system, you can work seamlessly with the financial planning and analysis. You get a seamless and complete solution with automatically updated structures, P&L, and reports. 

    10. Use Excel – But Not for Everything

    Excel is an incredibly powerful tool that we at Planacy love, but it’s not suitable for everything. If you want to set up different scenarios, work more frequently, increase engagement and accountability of the forecast, you need to reduce administrative time (as mentioned in point 8). In Excel, however, a lot of time is required to prepare, operate, and consolidate your processes. When many people are involved, you also risk getting inaccurate numbers due to human errors. 

    Use Excel for what Excel is good for, but in order to work more continuously and data-driven with your budgeting and forecasting process you should invest in a planning platform that can be customised for your business and unique processes. 

    Read more about how you know when it's time to leave Excel?

    Improve your financial planning today

    A common fear when you’re considering investing in a new system is that the process will be expensive, difficult and time-consuming, but with Planacy you can expect a quick and secure onboarding. We offer unbeatable time-to-value. Thanks to our powerful modules and customisable platform, Planacy can be implemented in just a few weeks. A modern system for financial planning enables more automated, efficient, qualitative and data-driven work with smart integrations and customised budget drivers. With Planacy, you’ll reduce time-consuming manual labour so you can focus on more value-creating activities such as analysis and follow-up. 

    Do you want to discuss your financial planning processes and how you can start working more continuously and data-driven? Book a free consultation. 



    Emelie Svensson
    Head of Customer and Planning Success

    Would you like to know more?

    Planacy's planning platform is fully customisable for your business, your processes and your needs – no matter your industry. 

    Book demo  Contact us