FP&A: Bridging the gap between finance and the rest of your organization

For most organizations, planning matters. It’s key to decision-making, stakeholder buy-in, and future success. But if planning isn’t linked to your finances, it can be a lot more challenging.

What’s become apparent in recent years is that most company systems can’t link their finance function to their planning tools. Which can leave businesses disadvantaged from the outset.

In fact, most are still using Excel. But that can create problems.

The issue with Excel for financial planning and analysis

Companies that use Excel do so for a variety of reasons. Adoption through familiarity has made it a popular choice despite its limitations. Excel continues to be a basic spreadsheet tool, not a solution.

But that’s only the beginning. Other common issues with Excel are:

• Inaccurate and inflexible: Excel spreadsheets are more prone to mistakes and inaccuracies, often due to multiple users, which can result in hundreds of versions and missed opportunities. And any attempts to lockdown templates can result in a loss of flexibility.
• No single data source: Excel sheets need to be manually fed data, which can affect data quality. At the same time, working with multiple sources of data can make it impossibly slow and cumbersome to use and update.
• Lengthy manual amends and scenario planning: Single amends or scenario planning, such as changing a percentage point by one figure from 2% to 3% to see outcomes, can mean manually updating multiple spreadsheets (for some organizations, this can be in the 100s of spreadsheets) and the possibility that some can be missed. And single changes can also mean having to start the whole process from the beginning every time.

The fact is, Excel’s simple accounting capabilities were not designed to power an entire organization or connect different functions, such as finance and sales. And it was never intended to become a single source of truth.

Its lack of integration makes it a bad choice for this kind of work, as it doesn’t easily connect day-to-day requirements with relevant data and your finance functions. FP&A bridges this gap and allows instant and easy financial planning and analysis that powers decision making.

The FP&A way

FP&A's integrated solution removes barriers and silos and puts finance and figures at the heart of your organization. This goes beyond traditional budgeting and forecasting processes to allow for things like rolling forecasts and scenario planning. It also lets you use data, deep learning, and AI to work smarter and automate forecasting and analysis, which Excel cannot do.

And then there are the other benefits it delivers over less integrated solutions, which include:

• Improving financial management and performance measurement: simplifying processes and making them more efficient gives your people more time to make the right decisions based on the correct data.
• Standardize templates, systems, and processes: robust enough to allow for global standardization of data and analysis, flexible enough to adapt to regional requirements.
• Automating low-value tasks: removing time-consuming manual processes and tasks freeing your users to focus on the matter at hand, rather than the admin involved in getting there.
• Improving analysis and report on position: giving you the facts from a single source of truth, enabling you to build real insights, along with powerful data visualization capabilities to help boost engagement and accessibility.
• Engaging and communicating with the wider company: gives you the tools to tell the story more powerfully and get stakeholder and colleague buy-in straight away.
• Web-based solution: gives you a single, integrated solution accessible from anywhere in the world, even offshore. So no more data confusion, duplication, error, or unnecessary manual processes.

But what does this look like in practice?

DOF and FP&A

DOF delivers offshore marine services across the globe. Managing the financial requirements has always been a challenge with numerous regional disparities, intricate long- and short-term contracts, and a large and varied workforce. For any individual account, this could often result in 100s of spreadsheets, all needing manual administration.

More importantly, DOF was also in the process of trying to meet the incredibly complex requirements of IFRS16, and their existing systems and processes just weren’t up to the task. This led them to FP&A, which would remove spreadsheets, create a single source of truth, automate much of the admin, and fully integrate with their ERP. And it could be launched within a very tight deadline.

FP&A’s implementation at DOF has transformed their budgeting and forecasting processes across the entire organization. They are now IFRS16 certified, have standardized accounting and budgeting, and can instantly plan for the future. In an increasingly challenging industry, it has become integral to their success on such large-scale projects.