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Advice and Information for Finance Professionals

The Goal of Financial Planning & Analysis and How to Get There

Guest Author

By Todd Rebner, Datavail

The goals of financial planning and analysis are many, but at the very heart of it, most financial managers and directors simply want accurate reports and forecasts, and simple and efficient processes so that they can make timely decisions that will increase revenue and grow the business.

In this post, we’ll look at what a strong enterprise performance management (EPM) system looks like; how EPM cloud systems—and Oracle Planning & Budgeting Cloud, in particular—help companies achieve their FP&A goals; and what you need to do to make the move to the cloud today.

The Purpose of Enterprise Performance Management Systems

When it comes to the EPM systems that support and bolster financial planning and analysis, a major goal is to provide an accurate record or audit trail of activities and transactions. While improving performance of an organization is a major reason for keeping records, the requirement for such detailed and accurate reporting stems largely from legal reasons such as taxes, financial reporting, securities laws, privacy laws, fraud prevention, and self-defense.

A second and parallel goal is to improve operational efficiency. Strong record keeping and good data visualization help FP&A teams to recognize data patterns that point to opportunities, mistakes, irregularities, strengths, vulnerabilities, and profitability. Through strong data control, analysis and presentation, processes are continuously improved and a record of incremental improvements is maintained.

A third major objective of financial systems is data security. Secure access and user controls result in a record of who has seen a file, who has not, who needs to see it, and who has been notified. It’s difficult—if not impossible—to attain such nuanced access and tracking systems when everyone is using their own version of an Excel spreadsheet with no central activity tracker.

Those are the basics. What does the advanced system look like?

Performance Goals for FP&A Systems

When you combine all the capabilities of a software suite such as Oracle Planning and Budgeting Cloud, asking what it can do for you is like asking what a smartphone can do for you: Where do you start?

On a smartphone, you’d want—at minimum—to be able to make calls, send text messages, and record images, sound, and video. For an EPM system, you’d want it to do budgeting, planning, and forecasting:

Better Budgeting

One of the biggest benefits of using Oracle Planning and Budgeting Cloud is the ease with which you can run scenarios on a wide range of variables and get results in seconds. With access to historical data, the system can sharply predict line item ranges, compare them with actual spending trends, and alert you of potential problems.

Better Planning

Oracle Planning and Budgeting Cloud is a lot more than a bookkeeping system. It combines rule sets such as FASB accounting standards, pre-built logic, and best practices hard-baked into the software—all maintained, patched, and upgraded by Oracle in the cloud. Fast-growing organizations are hard to plan for. Oracle Planning and Budgeting Cloud makes it easier by providing system feedback when assumptions don’t match data trends.

Better Forecasting

The majority of businesses with annual revenues under $1 billion are able to accurately forecast cash flows for only a few months into the future. More than four months out, most manual forecasts based on compiling spreadsheets are useless. With an EPM system that is well-configured and successfully adopted, it’s possible to make accurate predictions of long-term projects such as entering new markets, entering new territories, setting compensation levels, and predicting future needs.

Faster Execution

“Always Be Closing” might be good advice in sales but it’s terrible advice in financial management. If you are always playing catch up trying to document what happened instead of projecting what’s coming, then you’re wasting a lot of organizational talent, as well as the many opportunities that pass before you unseen. In an Oracle survey of small and medium businesses, 93% of financial managers say the ability to execute strategy quickly is the most important feature in a budgeting and planning system. Strong data management combined with strong data visualization gives you the ability to see signals quickly and act on them with greater confidence.

Configuration Goals for Cloud-based FP&A

A great deal of the benefit of good financial planning software is not how complex it is, but how simple it is to do complex things. A good system has to have a fast adoption curve in order to inspire daily use, to bring new hires up to speed quickly, and to respond to a market that expects real-time analytics.

Here are some of the capabilities you should look for when deciding on a planning, budgeting and forecasting system:

  • Built-In Assistance: Guidance for everything from deploying the system, migrating data, and building reports and dashboards.
  • Accessible from Anywhere: It’s a given that in today’s world, authorized users want access to their data instantly, wherever they are, on whatever device they want to use. Oracle Planning and Budgeting Cloud combines great access tracking and control with responsive design to empower modern finance teams.
  • Scalability: You won’t outgrow Oracle as soon as you finish learning how to use it. You can scale up data storage, processing, and analytics in the cloud whenever you need it. As your operation scales with new locations and users, your financial management system scales, too.
  • Great Visuals: Come for the financial controls, but be sure to stay for the pretty pictures. Oracle Planning and Budgeting Cloud transforms two-dimensional data into colored, textured, layered analyses that visually highlight important trends or inconsistencies. It provides terrific templates and tools that allow you to customize your data sets without corrupting everyone else’s view. Improvements you make to reports and dashboards can be securely stored and shared with everyone.
  • Cost Savings: A major reason for making the move to cloud-based EPM is the financial savings. In the cloud, you pay only for the resources you need for as long as you are using them. The auditability of closed-loop EPM systems saves enormous time in tasks such as quarterly closings, securities filings, and other required financial disclosures.

Stepping Up from Spreadsheets to FP&A in the Cloud

One of the benefits of moving from spreadsheets to true financial planning systems is how painless the transition is. Oracle Planning and Budgeting Cloud features intelligent deployment, which will warn you if you’re trying to structure something that violates best practices.

The system’s flexible deployment can accommodate 10 users as easily as 10,000. It includes built-in help with templates, migration, diagnostics, process flows, and alerts. It has great file transfer capabilities that let you move data quickly from on-premises to the cloud. And it offers great data integration —with Excel, of course, but also with any other Oracle cloud application.

If you’re ready to take a step up to a serious EPM system, Datavail’s experts are available to help you assess, plan, and execute your move to the cloud. If you’ve never been to the cloud and you are curious how much the migration would cost, how long it would take, and what results you can expect, contact Datavail to get started.

Ready to learn more? Download our paper, "Why Finance Leaders are Dropping Excel for Oracle Planning and Budgeting Cloud."

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