The Ledger
Curated content foranalytical business leaders
Tag Archives: financial planning and analysis
FP&A Trends: Measuring FP&A Performance with Key Performance Indicators (KPIs)
February 1, 2022
“So how can an FP&A function implement a good KPI framework? First and foremost, the questions in formulating the KPIs should be tied to the strategic objectives of the business – the value drivers. Once the right questions are selected for the KPIs, three foundational elements discussed below should be factored in building a strong FP&A KPI framework:”
- Reliable insights
- Accountability
- Quality data
FP&A Trends: Financial Planning in the Age of Uncertainty
January 20, 2022
“Uncertainty can take many forms. It can manifest in a natural disaster, the merger or acquisition of a competitor, geopolitical changes, or a global pandemic. In fact, the current Covid-19 crisis has challenged the forecasting models used, especially when it comes to predicting the evolution of a company’s business in a highly uncertain environment.”
CFO Dive: Bad Use of FP&A Costs U.S. Companies $7.8B a Year
January 17, 2022
“Manual data inputting leads to errors, which can lead to reputational hits. It also leads to siloed operations, which can put an organization at the mercy of a single employee. When a bookkeeper at the Florida Republican Party passed away, the organization couldn’t access the data the person managed, causing it to miss a Federal Election Commission reporting deadline. “The employee did not share with other members how to work the software, rendering it unworkable after he died,” the report says. That kind of thing, along with reporting errors, can impact the organization’s reputation, which, for a company relying on investment capital, can impact the amount of money it can attract and at what cost.”
FP&A Trends: Caution: Forecast Accuracy is Seasonal Too!
December 16, 2021
“The benefits of measuring seasonality of accuracy are that users can plan high/low scenarios for each prediction based on the season-specific range of possibilities. Departments can adjust how much capacity, safety stock, or cash reserves are needed based on their own worst case. And it’s easier to determine missing factors for model improvement when you focus on adding predictors to the high noise areas of the model.”
FP&A Trends: Best Practices in Implementing the Rolling Forecast
December 15, 2021
“The main criticism of the traditional budget is that it does not react to what is actually happening in the business during the year. But a Rolling Forecast solves that problem, helping companies to continuously plan (forecast) over a set time horizon.”
FP&A Trends: The Key Steps to Fostering a Data-Driven Culture
December 9, 2021
“Technology is not the key issue to implement a data-driven culture within an organisation. The first crucial task is to determine the data strategy and focus on the business problem. To be successful though, embracing the changing culture is the most important aspect of all”
FP&A Trends: Rolling Forecasts: The Important Role of Technology
December 2, 2021
“Year-end forecasts help to make the decisions required to achieve annual goals. However, they can be relatively inflexible. Due to the time needed for preparation, they are also based on data that may be halfway up to date when creating the forecast but quickly become outdated during the fiscal year. This is where introducing Rolling Forecasts is particularly valuable for organisations in industries and markets with high volatility.”
FP&A Trends: Corporate Performance Management in the Age of Agility
November 16, 2021
One of the key transformation pillars for FP&A Teams is to “optimize the use of technology:
- Digitalise the forecasting and reporting cycle to promote collaboration and access to data while ensuring security and traceability
- Take advantage of Artificial Intelligence (including analytics) to solve current problems and improve its ability to anticipate, decide and act
- Equip yourself with a modern reporting tool that allows users to easily access data, conduct their own analyses, and define their own dashboards (taking into account mobility needs, if applicable)”
FP&A Trends: What is Integrated FP&A?
November 12, 2021
“FP&A is all about managing the value of the company through understanding, describing the value through models, supporting decision making, telling the story, and communicating to the stakeholders. Integrated FP&A involves harmonising the three levels of planning – Strategic, Financial and Operational levels”.
