The Ledger
Curated content foranalytical business leaders
Tag Archives: financial planning
FP&A Trends: Do You Know Your Business Drivers or Still Rely just on KPIs?
January 26, 2023
“Driver-Based Planning and forecasting allow us to react to changes in the external environment, create more accurate and meaningful plans, and promote understanding of the business and its drivers.”
CFO Magazine: A CFO Action Plan for 2023
January 10, 2023
“CFOs should strengthen their supply chains in the year ahead, carefully analyzing them end-to-end to identify potential weaknesses and opportunities. Identify critical suppliers, build relationships with them, ensure they have scale, and designate alternate sources where needed. Engage key customers in joint demand planning, gaining commitments for short-term requirements. Invest in preventive maintenance programs to minimize unplanned downtime. Implement cycle counting for raw materials, finished products, and spare parts to ensure complete visibility. And, in general, monitor your supply chain risks and react accordingly.”
CFO Dive: Splurge on Automation Before Recession Hits, Says Former ‘Serial CFO’
October 11, 2022
“Automation in areas such as FP&A can go further than simply reducing the need to hire new staff or cost-cutting measures, Ross said — it can also help to strengthen business outcomes, allowing finance teams to collect data more swiftly and to better consolidate their future strategies.”
CFO Journal: Automated Financial Forecasting: Remaking the Planning Process
August 24, 2022
“A solid foundation of data quality and data management is the first essential input to establishing automated, adaptable, and real-time forecasting. Leveraging continuous flows of data, algorithmic forecasting models allow organizations to quickly adapt to ever-changing business environments.”
CFO Insights: Provoking the Future: How CFOs Can Take Action to Illuminate Uncertainty
August 10, 2022
“Build scenario-planning muscles. In a linear world, it was customary to consider a dominant version of the future and construct possible variations around it. Now, with so much about the future up for grabs, CFOs need to have sufficient humility to acknowledge that nobody knows how things are going to turn out and to consider multiple, equally plausible futures. As they explain that future using numbers and models, the gaps will enable them to identify uncertainties. As the actual future develops, they may adjust those scenarios dynamically. Every five years, they may even have to start over.”
CFO Insights: Future scenarios: Are CFOs Too Worried About Inflation—or Not Worried Enough?
August 5, 2022
“As CFOs watch inflation numbers rise month after month, so may the intensity of their concerns. Now that it has climbed to an altitude unseen for 40 years, they may be tempted to assume that it is bound to go even higher.
But what if the picture we have today isn’t a reliable guide to what’s ahead? What if by next year inflation is trending down? Or maybe even has dropped into disinflation, with the Consumer Price Index hovering between 0% and 1% as a result of a faster-than-expected resolution of supply chain disruptions combined with diminished consumer demand.”
FP&A Trends: The Future of Business Modelling
July 25, 2022
“In most companies relying on Excel-based solutions, Excel is doing everything: it functions as the database, the calculation engine, and the analytical tool, sometimes all within one workbook. This approach is resource-intensive and eventually becomes unsustainable. And while Excel is an excellent tool for spreadsheets, financial modelling, and provides FP&A with much-needed agility, it’s not effective for sophisticated FP&A processes such as data consolidation, repetitive reporting processes, drill-downs, and comparison analysis (such as scenario comparisons). A technology solution is needed to unlock additional power.”
CFO Magazine: Dynamic Financial Planning for Real Events, Not the Calendar
July 12, 2022
“With the risk of a recession rising, companies in most industries will have their financial planning processes severely tested over the coming months. They’d do well to replace a fixed annual exercise with a flexible approach that responds to changing conditions. Traditional planning methods have caused firms to be caught flat-footed by external shocks, and unable to quickly adapt or reallocate money and other resources.”
FP&A Trends: Tips and Hints On Implementing Driver-Based Models
June 28, 2022
“The first step in building a driver-based model is the decomposition of the business model. The easiest way would be to start with Income Statement (revenues and costs); however, we should not forget about the Balance Sheet and Cash Flow effects.”
