The Ledger
Curated content foranalytical business leaders
Tag Archives: FP&A
FP&A Trends: How to Become a Compelling Storyteller
March 29, 2022
“More than half of the participants responded that they are still spending the majority of their time on data reconciliation and reporting. About 35% are spending the majority of time on analysing and interpreting data, while only 9% spends most of their time on storytelling and business partnering.”
CFO Magazine: Using Automation to Supercharge FP&A Teams
March 11, 2022
“How do you know if your company actually needs or stands to benefit from automation? If your team is over-reliant on spreadsheets, spends hours manually entering data, and has trouble processing and disseminating that data to decision-makers, you could be a prime candidate.”
FP&A Trends: What Skills Should FP&A Develop by 2030
March 7, 2022
“The term Financial Planning and Analysis is evolving to the broader concept of Scenario Planning, with a rolling planning window opposed to a fixed annual 12-month focus; planning will be a single integrated strategic financial and operational model with on-demand frequency versus 3–5-year corporate plans. The Scenario Planning approach is also highly technological with automated and advanced analytical systems that allow an output within 1 to 3 hours, versus the old planning model driven by manual Excel spreadsheets that would require weeks or even months to consolidate. Finally, the new approach to planning allows multiple scenarios with supporting documentation that facilitates decision-making.”
FP&A Trends: Continuous Planning To Dynamic Business Environment
February 9, 2022
“Continuous Planning replaces the traditional static and calendar-driven process. It is a dynamic and open-ended planning approach that responds to internal and external events as they occur. In addition, the use of technology facilitates planning agility and flexibility through real-time analytics and automation.
To be successful in continuous planning, a dynamic mindset is necessary. Compared to traditional planning, where the goal set-up process is done only once, continuous planning allows organisations to achieve more of their targets.”
FP&A Trends: Measuring FP&A Performance with Key Performance Indicators (KPIs)
February 1, 2022
“So how can an FP&A function implement a good KPI framework? First and foremost, the questions in formulating the KPIs should be tied to the strategic objectives of the business – the value drivers. Once the right questions are selected for the KPIs, three foundational elements discussed below should be factored in building a strong FP&A KPI framework:”
- Reliable insights
- Accountability
- Quality data
FP&A Trends: Financial Planning in the Age of Uncertainty
January 20, 2022
“Uncertainty can take many forms. It can manifest in a natural disaster, the merger or acquisition of a competitor, geopolitical changes, or a global pandemic. In fact, the current Covid-19 crisis has challenged the forecasting models used, especially when it comes to predicting the evolution of a company’s business in a highly uncertain environment.”
CFO Dive: Bad Use of FP&A Costs U.S. Companies $7.8B a Year
January 17, 2022
“Manual data inputting leads to errors, which can lead to reputational hits. It also leads to siloed operations, which can put an organization at the mercy of a single employee. When a bookkeeper at the Florida Republican Party passed away, the organization couldn’t access the data the person managed, causing it to miss a Federal Election Commission reporting deadline. “The employee did not share with other members how to work the software, rendering it unworkable after he died,” the report says. That kind of thing, along with reporting errors, can impact the organization’s reputation, which, for a company relying on investment capital, can impact the amount of money it can attract and at what cost.”
FP&A Trends: Caution: Forecast Accuracy is Seasonal Too!
December 16, 2021
“The benefits of measuring seasonality of accuracy are that users can plan high/low scenarios for each prediction based on the season-specific range of possibilities. Departments can adjust how much capacity, safety stock, or cash reserves are needed based on their own worst case. And it’s easier to determine missing factors for model improvement when you focus on adding predictors to the high noise areas of the model.”
FP&A Trends: Best Practices in Implementing the Rolling Forecast
December 15, 2021
“The main criticism of the traditional budget is that it does not react to what is actually happening in the business during the year. But a Rolling Forecast solves that problem, helping companies to continuously plan (forecast) over a set time horizon.”
