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Tag Archives: Budgeting and Planning

CFO Dive: Driver-Based Budgeting Touted for Integrating Financial and Operational Planning

“Driver-based budgeting links real resources and activities to your budget, and most FP&A organizations are striving to achieve that. From my perspective, it really acknowledges that the budget is the articulation of a series of operational items or activities. It’s different from traditional budgeting in that it shifts the focus to outcomes, and that’s ultimately how you drive your annual budget.”

Read More at CFO Dive >

SF Magazine: Budgeting Revisited

6 things to consider when innovating your budget:

1. Corporate Culture

2. Comprehensive Approach

3. Strategy & Scenario Planning

4. Relative Target Setting

5. Compensation System

6. Flexible Planning

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SF Magazine: Strategies for Global Operations

“A well-designed, functional, and comprehensive budgeting system is an essential management tool for a multinational business. As we discussed, these companies must forecast the impact of global external variables (like foreign exchange and interest rates) as well as internal variables (transfer prices, supply-sourcing subsidiaries, production sites, etc.). All in all, the budgeting system should be effective not only in monitoring progress compared to plan but also in adjusting to unpredictable events and circumstances.”

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SF Magazine: Managing International Operations in Uncertain Times

“It’s also evident that foreign currency exchange rates, interest rates, and inflation inherently carry an element of uncertainty and volatility, which represents risks that financial professionals must manage in order to better forecast, monitor, and control the performance of their organization’s international business operations.”

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CFO Dive: Zero-based budgeting makes a comeback, but it’s different this time

“A ZBB-like review of expenses can lead to better analysis of the activities that support the customer,” Bryan Lapidus said. “This could be a huge value-add to the business by helping to assess profitability of products and services accurately, and be more meaningful than simply reading down the list of contracts in a general ledger.”

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FP&A Trends: Let Traditional Budgeting be a Victim of this Pandemic

“Instead of annual forecasts of things that cannot be predicted or controlled, with December 31 as the fictitious deadline, companies should monitor the reality on a regular basis and work more with trend analyses and unbiased (mathematical) forecasts.”

Read more at FP&A Trends >

Global Banking & Finance Review: The Impact of Covid-19 on Planning

“The Hackett Group’s EPM Performance Study revealed that top-performing FP&A organizations have invested more in technology, which has enabled them to run more analysis and deliver reporting faster and more efficiently. Of top performers, 67% have implemented a primary financial planning and forecasting system to consolidate corporate and country, region or BU information.”

Read more at Global Banking & Finance Review >

Rethinking the Business Planning Process

“Many plans and budgets are now based on outdated assumptions and data, requiring FP&A teams to rethink the annual business planning process. Discussions with FP&A leaders, CFOs, and Deloitte’s Finance Transformation and Human Capital professionals, suggest several factors have led leaders to challenge the traditional process, including the need for constant scenario development and modeling; a lack of confidence in future projections; the urgent requirement for decisions about courses of action; an unclear decision-making framework, particularly around capital allocation; and time-and resource-consuming manual iteration.”

Read more at CFO Journal >

CFO Priorities for 2021 Includes Digital Transformation

“After surviving the initial wave of the pandemic, many organizations obtained a real-world view of how far along they were in their digital transformation journey. In many cases, the verdict was “not nearly as far as we thought we were.” Although most companies have automated processes, fewer have optimized that automation; fewer still have deployed next-generation technology to transform their business models. In fact, our research and experience with organizations worldwide indicates that very few have taken the necessary steps they need to become truly digital. They may have formed a digital veneer around their core capabilities, but being truly digital means changing the organization at its core.”

Read more at Forbes >