Today’s FP&A teams are spending the majority of their time on tasks that bring limited value to the organization. The efforts and skills of the team are not being used to analyze data - which is where an organization needs them most. This is due to a variety of factors that encompass how FP&A teams should be evolving and the importance of adapting to modern solutions.
Here Are The 5 Reasons Why Your Process is Outdated
#1 You are Wasting Your Time
Yes, you read that correctly. Your current FP&A process is taking your precious time for granted. Reports that should be generated in an instant are taking longer than they should. More specifically, 5x longer than they should. This is not your fault, for as long as we in financial planning remember compiling data from multiple sources, verifying formulas, reconciling numbers, and ultimately generating these reports is a timely process in itself. But these lengthy, outdated processes, that require numerous checks and balances for accuracy need to be left in the past - so that your true value, analyzing data, can be done in the present.
#2 They Leave Room For Error
Not only are your current processes time consuming, but they also require continuous checks to ensure accuracy, which lengthens an already tedious process. Formulas are complex and it is very easy for them, hidden throughout Excel spreadsheets, to be inaccurate or become wrong due to the manual processes that occur. It is interesting to think that in the world of finance precision is a top priority and yet many mistakes in finance go unnoticed. Errors are not only costly but can be detrimental acting in a domino-like effect, and in most cases - these errors were completely avoidable. Now I am not saying you should move away from your trusted Excel, I’m merely saying you can use Excel with the right platform to rid yourself almost entirely of these tiny errors. Can you imagine having version control and the ability to easily avoid mistakes that could have led to massive issues?
#3 The Number of Stakeholders
Ok so we are wasting time, we are making mistakes and so much of this is due to the fact that we are working on spreadsheets, localized spreadsheets for that matter. Now take local documents, share them with the numerous players that require them and we find ourselves at the crossroads of explaining variances. We have multiple, custom reports, with different numbers, from numerous players all of which have vested interests in different insights about the business. These variances are occurring as the accumulated numbers are a summary of inputs from multiple sources - meaning they are rarely the same in terms of data structure. It is impossible to reduce the number of stakeholders in an organization, well at least it is not something that an FP&A professional should be worrying themselves with. However, consolidating data into one place would definitely make a huge difference, leading us to our next point.
#4 Too Many Data Sources
Copious players, numerous data sources, no wonder we are taking so long to generate reports. The average FP&A professional spends 65% of their time on manual processing versus analyzing data. The majority of these manual processes consist of combining, matching, and verifying these different data sets from numerous data sources, a feat that is easily overcome with automation. Automating tasks means data is collected from all sources and by utilizing software, you not only reduce errors but limit the manual workload for your fellow FP&A professionals. Make use of your current infrastructure, your Excel sheet addiction, and add to it to create the perfect, mistake-free solution for your business.
#5 Unorganized Data Sets
Reports should be fairly easy to generate but with data scattered across departments, software types, and more this process becomes tedious and difficult. By having all data sets consolidated, report generation becomes a manageable, doable task. The most popular accounting software for small businesses, Quickbooks, can provide reports in seconds, why? Their accounting software consolidates everything required for the day-to-day accounting of a business, all in one place. It can create invoices, organize cash flows, track sales, expenses, and more in one interface. This concept of organizing data sets is now the new norm - and any business failing to hop on this bandwagon is lightyears behind.
Now for FP&A, your software will need to offer a lot more to be useful and solve all the issues mentioned above. These software types made for FP&A are commonly referred to as Corporate Performance Management solutions and if you are interested in diving into the different types of CPM software types available check out our CPM Report. The report breaks down the different CPM software types for an easy guide to help you find the best solution for you. A CPM works by taking data sets from all across the organization and consolidating them into one unified interface. These different types of software save time by combining and structuring multiple sources together to make report generation a breeze.
FP&A solutions take the issue out of having multiple stakeholders by offering the ability to generate specific reports for specific players and when consolidated, variances are flagged in bright red. It provides a means of accessibility control guaranteeing sensitive information stays hidden - a common issue when it comes to consolidation. Too many data sources become a non-issue as they are integrated. Changes within the software used by other departments are automatically updated in the FP&A software and made apparent to the professionals analyzing the data. If changes are made on local Excel Files these changes will automatically appear once the recent versions of Excel spreadsheets are uploaded. Solving all aforementioned issues - without the need to change current processes.
Overcome Even More than you Expected
Now we have solved the majority of issues with the financial planning processes - by adopting an easy-to-use and simple to integrate solution, but as we in FP&A are aware, our real value lies in our analytical abilities. With so much to deal with, analytics went to the wayside as reports needed to be generated which was a huge drain on our time due to the manual processes we found ourselves dealing with. Past hesitations to the adoptions of technologies that provide the dashboarding and visualization benefits mentioned above include implementation time and the manpower required. Power BI solutions are visual tools that can provide the benefits of clear financial analytics, however, IT professionals are required for integration and this can be a lengthy process in itself.
By utilizing a platform that can be integrated almost immediately, we now free up time to analyze reports, provide insights, get to the bottom of the real issues at hand, and suggest solutions. A platform like DataRails, that works with your existing infrastructure, can be implemented quickly to create instant graphs and charts for easily digestible, actionable insights into operations. It works by integrating with existing CRM’s, ERP’s, and even Excel Spreadsheets leaving no room for error or guesswork by offering clear drill-downs into every and any data set. As an FP&A solution, the DataRails platform allows for the instantaneous explanation of variances and automatic checking of formulas. Ultimately this creates an FP&A department that can truly add value to the different departments of the company by providing actionable insights.
Not adopting a financial analytics solution is leaving you, your department, and organization in the stone-age. I am not saying you should leave your trusted Excel spreadsheets, I am saying use them with the right software and you can have the solution you need to truly excel as a modern FP&A professional.