Improve Corporate Financial – Corporate financial planning and analysis (FP&A) is one of those things that, if done right, can make a huge difference in a company’s success. But if you’re like me when I first started in the world of FP&A, you might feel overwhelmed by the complexity of it all. The spreadsheets, forecasts, budgets—everything can start to feel like a big jumble. However, after some trial and error, I learned that improving FP&A doesn’t have to be a monumental task. It’s about breaking things down into clear, manageable steps that you can follow.
Over the years, I’ve come to realize that improving corporate FP&A boils down to 6 simple steps. These are steps that, when done consistently, can not only make your financial planning more efficient but also set your organization up for long-term growth. Let’s dive into them, and I’ll share a few lessons I’ve learned along the way.
How to Improve Corporate Financial Planning and Analysis in 6 Simple Steps
1. Set Clear, Actionable Goals
The first thing I learned when improving our financial planning was that goals are everything. It sounds simple, but trust me, it’s easy to get caught up in the numbers and forget what you’re actually working toward.
When I first started, the goals we set for our financial team were often vague. We’d aim to “increase profitability” or “reduce costs,” which, sure, sounds good in theory, but what does that actually mean in practice? Without specific, actionable goals, it’s like trying to hit a target blindfolded.
So, the first step in improving FP&A is to set clear, measurable goals. And by measurable, I mean goals with deadlines and numbers attached to them. For example, instead of “reduce costs,” say “reduce operational costs by 10% over the next 12 months.” This way, you can track your progress and adjust strategies as needed.
A tip I’ve learned the hard way is to align financial goals with company objectives. This ensures that your planning isn’t done in a vacuum but supports the overall mission of the business.
2. Improve Data Accuracy and Accessibility
Data is the foundation of financial planning, but not all data is created equal. If your company is using outdated or inaccurate data, any financial forecasts or analyses you do will be off. This was something I ran into early on—I was working with data that wasn’t up to date, and that led to some really skewed financial reports.
Improving your FP&A process starts with making sure you have access to clean, accurate data. This might mean implementing new software or tools to automate data collection and ensure that everyone across departments is on the same page. You don’t want to be sifting through spreadsheets, double-checking numbers, or dealing with human error.
The key is to set up a system where data is easily accessible and regularly updated. Whether it’s using cloud-based tools or automated reporting software, streamlining data flow will save your team hours of work and help you make better decisions.
3. Use Rolling Forecasts Instead of Static Budgets
One of the biggest shifts I made in improving corporate FP&A was moving away from static annual budgets and adopting rolling forecasts. In the past, we would spend months preparing a detailed annual budget, only to find out a few months later that things had changed drastically. By then, it was too late to adjust the budget.
Rolling forecasts are updated regularly (monthly, quarterly) and take into account any changes in the business environment. This method allows you to adapt quickly and make decisions based on current data rather than a stale forecast.
For example, in our company, we implemented rolling forecasts and saw a massive improvement in our ability to respond to changes in the market. Instead of waiting until the end of the year to make adjustments, we were able to pivot quickly, making sure our financial goals were still achievable.
4. Leverage Financial Analytics and Technology
Here’s the thing: spreadsheets are great, but they’re not the end-all-be-all. As I learned, relying solely on spreadsheets can lead to inefficiencies, errors, and missed opportunities for deeper insights. That’s when we started embracing financial analytics and technology.
There are so many tools and platforms out there that can help streamline your financial analysis and give you more accurate forecasts. For example, we started using business intelligence (BI) tools to get a clearer picture of our financial data, allowing us to easily spot trends, track KPIs, and even run predictive analyses.
Investing in the right software can completely transform your FP&A process. It’s not just about automation; it’s about unlocking deeper insights that can guide strategic decision-making. Trust me, the time spent setting up these systems will pay off tenfold in the long run.
5. Enhance Collaboration Across Departments
I used to think that financial planning was the sole responsibility of the finance team. But I quickly learned that this approach wasn’t effective. Successful FP&A requires input from every department in the company—marketing, sales, operations, HR—because their decisions directly impact financial outcomes.
One of the best things we did was increase collaboration between finance and other departments. This meant meeting regularly with department heads to get a better understanding of their plans and challenges. This not only helped improve the accuracy of our forecasts but also made departments feel more involved in the financial process.
Collaborating across departments also ensures that everyone is on the same page when it comes to financial goals and strategies. It makes it easier to identify potential roadblocks and plan for them ahead of time.
6. Measure and Adjust as You Go
Finally, I’ve learned that FP&A is a continuous process. You can’t just set up your goals, make a few forecasts, and call it a day. The market, your company, and the economy are constantly changing, so your financial plans need to evolve as well.
The key here is to regularly measure your performance and adjust your plans accordingly. This could mean revisiting your forecasts, checking your actual performance against your budget, and adjusting your strategies based on what you’ve learned.
When we started regularly measuring our progress, we were able to identify patterns—both positive and negative—much more quickly. This allowed us to act fast and make adjustments before problems grew too large.
Improving corporate financial planning and analysis might seem like a daunting task at first, but by following these 6 simple steps, you can streamline your process, increase your accuracy, and better support your organization’s goals. Start with clear goals, clean data, and a collaborative mindset, and you’ll soon see improvements in both efficiency and financial performance.
Remember, FP&A isn’t a one-time effort—it’s an ongoing process that evolves with the company. So don’t get discouraged if things don’t improve overnight. With the right systems and mindset in place, you’ll set your business up for financial success.
