For those involved in financial planning and analysis, the bad news is that the work can be boring much of the time. The good news: it’s quickly getting more interesting. As with many corporate processes, technology is driving fundamental changes in financial planning and analysis. Thanks to a new generation of tools, the drudgery factor is lessening and practitioners are spending more of their time doing actual planning and analysis. And that’s a fortunate development, not just for financial planning and analysis professionals, but also for the companies they work for. In almost every industry, today’s souped-up business environment drives a concomitant need for heightened strategic input.
Financial planning and analysis encompasses a plethora of strategic activities, from budgeting and forecasting to management reporting, business-decision guidance, and specialized tasks in areas like risk management. Unfortunately, as much of 70% of the work still consists of acquiring, verifying, and reconciling data.
That will provide an opportunity for more companies to follow those that have moved away from old-style, static annual planning and migrated toward continuous planning. CFOs are able to see what’s going on in their businesses and their world in real time, and can make adjustments. CFOs can see opportunities faster than others because of the tools he has, or see where problems are going to happen so he get out of the business faster, that’s what is happening.
For example, new financial planning and analysis tools allow CFOs to produce what-if balance sheets for multiple scenarios so they can anticipate 6 to 12 months out whether they might miss benchmarks required by debt covenants, says Alan Hart, principal consultant with Pacific Shine Group. But the new automation also goes far beyond that.
Segments by Keith Button, CFO Magazine