In our prior two posts, beginning here we’ve reviewed the findings of Aberdeen Research’s survey of over 200 hundred companies’ planning, budgeting and forecasting efforts. We’ve learned that the companies that take the time to do it right end up with dramatically better results — in terms of timeliness of financial reporting and the accuracy of budgets vs. actuals – than those who don’t.
In today’s third and final post on the topic, we’ll look at the tools and technology most commonly used, and summarize a few key takeaways.
One key finding is this: integration between an ERP system and a spreadsheet (typically Microsoft Excel) is a very important component. Companies need to be able to export data from their systems to a spreadsheet for further collaboration, review and editing. Over half of the best companies already do this, and nearly half of the ‘not-so-best’ companies do too. In many cases, spreadsheets are the primary (and sometimes only) means of planning reporting.
Key enablers noted by Aberdeen then include:
- Query and reporting tools, cited by almost four-fifths of the ‘Best’ companies
- A financial reporting and consolidation tool (70%)
- A discrete planning/budgeting/forecasting tool (68%)
- A dashboard (66%)
- ERP (62%)
And the key takeaway for all financial planners? These can best be summed up as:
- Plan to plan. Assign the right resources, tools and training.
- Identify the key business drivers. These are your KPIs. Understand, measure, track and study just the most impactful to gain the most bang for your planning buck.
- Collaborate. Ensure that all stakeholders have an ongoing say in the process.
- Utilize scenario analysis. Study and compare the impact of various events across the organization from a financial impact view. Set up What If models to test them.
- Create an analytical culture. In other words, use the data. Encourage the same across the organization. Growing companies today are doing this more than ever.
- Share with the outside enterprise. Share data across the enterprise for improved insights into suppliers and customers for improved accuracy in projecting supply and demand.
We’ve given you a lot of food for thought in this three-post series. The full Aberdeen report can be accessed here:
But our synopsis should give you more than enough fuel to get started. Comments – and your own experiences with budgeting and forecasting — are always welcome.