Are You Ready for New Revenue Recognition Disclosure Requirements?

Are You Ready for New Revenue Recognition Disclosure Requirements?

The FASB’s new revenue recognition guidelines are rapidly approaching at the end of 2017.  The new guidelines will clearly have an impact on the revenue recognition accounting process for impacted companies.

However, many have not fully internalized the impact this will have on their budgeting and planning for 2018.  And another requirement that most companies have not fully internalized is the impact on their reporting disclosures.

What the Experts are Saying

This angle on revenue recognition was recently highlighted in a CFO.com article authored by Eric Knachel, the senior consultation partner for revenue recognition in the National Office Accounting Services of Deloitte & Touche LLP.

In the article, Mr. Knachel highlights how the FASB’s new standard significantly increases the amount of information companies are required to disclose about their revenue activities and related transactions. To comply, a company will likely need new processes, procedures, and controls for:

  1. Gathering data
  2. Identifying applicable disclosures (based on relevance and materiality)
  3. Preparing/reviewing disclosures and related information

It will also require information systems and personnel to support disclosure-related activities.  Establishing and testing all of these elements will likely require significant time, money, and effort.

financial-reporting.jpegAlthough the new disclosure requirements don’t take effect for many companies until 2018, that doesn’t mean they can wait until the end of next year to deal with them.  As the new guidelines go into effect in 2018, publicly held companies will need to start disclosing the details in their Q1 2018 SEC filings.

This could present some major challenges since many companies already struggle to meet their filing deadlines.  Add in the time and effort required to satisfy the new disclosure requirements – along with the potential for problems and delays in collecting, preparing, and reviewing disclosures and related data – and the result could be late filings, internal control implications, or both.

Learn More

To learn more, check out the CFO.com article titled “Revenue Recognition Disclosure Requirements:  A Challenge That Can’t Wait.”

Related Posts

Accounting
Why Cash Is Still King

Cash flow reporting is an essential piece for any business. Planful Automated Cash Flow Reporting automates this complex process for you....

Read More
Accounting
Can Audits Help Improve Business Performance?

A recent Deloitte survey highlights how the information gathered through audits can be used to improve business performance....

Read More
Accounting
The New Game Plan for Finance and Accounting

In this interview, industry guru Brian Sommer highlights the impact of the digital economy on Accounting and Finance and “the new game plan” that’s needed....

Read More
How to Reduce the Pain of Board Reporting

How to Reduce the Pain of Board Reporting

Timely and accurate board reporting is a critical need in any organization. However, many Finance departments struggle in pulling together the variety of data required – reports, charts, graphs, and textual commentary.

The process consumes too much time and effort and can be error-prone if you’re using the wrong tools.  Leading Finance organizations are adopting cloud-based software platforms that can shave hours or days off the board reporting process.  This enables them to shift time from collecting and formatting information to performing analysis that moves the business forward.

Watch the Webinar Replay

Financial Close and Reporting – A Critical Process

The financial close and reporting process crosses multiple systems, departments, and locations.  It can also consume a lot of time and resources every month, quarter, and year-end.  According to a recent benchmark survey by APQC, the bottom performers take 12 days or more to close the books and report their results to management.  Then there is additional time spent on external financial reporting and creating regulatory filings.

The best performers are able to get this done in 5 days or less.  The advantage for companies with a fast close process is that they can spend more time on value-added analysis and decision making – and deliver information faster to both internal and external stakeholders.

Financial and management reporting itself can be complex.  Different users have varying needs.  For example, power users in Finance need the ability to create formatted financial statements, as well as ad hoc reports and analysis.  Finance executives need access to financial statements, but may also want to review key financial metrics and KPIs via interactive dashboards.  Casual users, such as line of business (LOB) executives, may also want to review financial metrics via dashboards or standard books of reports.

reporting requirements.png

Challenges in Board Reporting

One especially unique audience is external stakeholders, for whom the preferred reporting approach is board books and presentations that combine multiple data types into a single document – such as reports, graphs, charts, tables, and supporting textual commentary.  This segment also includes the creation of regulatory filings, such as SEC 10-Qs that include a large amount of textual information, along with supporting financial statements, charts, and tables.

The process of creating board books and presentations can be challenging as it typically involves multiple contributors, multiple data types, and multiple formats for the output.  In terms of contributors, this can include staff from Accounting, FP&A, Legal, Tax, and Audit, as well as the CFO, reviewing results and creating and editing the textual commentary.  The reporting team in Finance must collect all the reports, charts, tables, and commentary from multiple contributors, then package the information in multiple formats.  These formats can include books of reports for management or board meetings, accompanying board presentations, or regulatory filings.

board reporting.png

Managing this type of reporting using email and desktop productivity software (e.g., MS Office) can be cumbersome and time-consuming.  Then when a last-minute change is made to a number or comment, it must be manually updated in multiple places.  As a result, these types of complex reporting documents can take days or weeks to create and distribute.

Board Reporting in the Cloud

Forward-thinking organizations are leveraging the power of cloud-based enterprise performance management (EPM) platforms to reduce the pain and streamline board reporting.  There are a couple of key capabilities within cloud-based EPM platforms that enable this.

Consolidation – cloud-based financial consolidation applications, such as Planful Consolidation, help customers accelerate financial close cycles by doing the following:

  • Integrating data from disparate sources
  • Consolidating their results following multiple accounting guidelines
  • Automating key processes, such as adjusting journals, intercompany eliminations, and accounting for minority ownership

Cloud-based consolidation applications help reduce costs of compliance by generating a broad range of financial statements, with all the right controls and audit trails to document each step in the process.  They also help improve control and confidence in the financial results, with a single version of the truth for financial and operating results, as well as workflow and process controls to ensure all required tasks are completed.

Reporting – cloud-based reporting tools, such as Planful Reporting, support the production of  presentation-quality financial and management reports, as well as ad hoc reporting.  Planful Reporting is a true end-user reporting tool that allows Finance users to easily create reports and templates, without programming.  It also gives end users the ability to automatically generate reports and burst them out to managers via email.

Our Reporting module also automates the creation of regulatory filings, board books, and presentations that combine text, reports, and charts into a single automated document.  This eliminates most of the usual cutting and pasting of information from different sources, and it accelerates the production of these documents.

Accelerating Board Reporting

During a recent webinar on how to improve board reporting, we cited several customers who have seen significant improvements in their board reporting processes using our cloud-based EPM platform.

iCIMS is a fast-growing provider of cloud-based talent management solutions.  They had been managing financial reporting using spreadsheets and manual processes, and board reporting itself took 4 days to complete.  By moving to Planful cloud-based reporting solution, iCIMS was able to reduce board reporting from 4 days to 4 hours.  This time-savings allowed them to accelerate the delivery of board reports and shift Finance staff time to more value-added analysis.

Evraz is a manufacturer of specialty and commodity steel products, with over 2,000 employees and $3B in revenue.  Their Excel-based reporting approach was error-prone and time-consuming, taking them up to 2 weeks per month.  By moving to Planful cloud-based solution, Evraz was able to automate the collection of data from multiple sources and accelerate report-assembly from 2 weeks to 1 minute.

Signs That You Need to Rethink Board Reporting

So what are the signs that your organization may need to rethink its approach to board reporting?  Here are some of the “red flags” we’ve seen in working with clients to address this need:

  • Board/stakeholder reporting takes too long
  • Manual, time-intensive steps creating board books, presentations, and regulatory filings
  • Challenges getting multiple users to collaborate in document creation
  • Multiple versions of the truth
  • Inability to easily incorporate last-minute changes
  • Erroneous reports, books, and presentations
  • Lack of confidence in the results

To learn more about how to reduce the pain of board reporting and see a live demonstration of board reporting in the cloud, watch the replay of the webinar titled “Don’t Let Board Reporting Drag You Down Again.”

Watch the Webinar Replay

Related Posts

Reporting
Financial Reporting – Have You Seen the Light?

For many routine tasks, the need to just get it done tends to overshadow the inefficiencies and pain along the way. Then, once the task is complete, those irritations are quickly forgotten and your mind moves onto the next task. That is, until the offending task pops up again. Periodic financial reporting is a great ....

Read More
Finance Collaboration
VLOG: 3 Ways Finance and Marketing Can Stay Aligned During the Quarter

Planful Finance Director and VP of Demand Generation work together to ensure alignment. Learn about 3 key reports: actual spend vs budget, historical channel ROI, and customer acquisition cost (CAC)....

Read More
Reporting
4 Reports Every FP&A Team Should Be Using

Financial reporting is an essential task for FP&A teams to be able to communicate financial and non-financial metrics. FP&A teams should be leveraging these four essential reports techniques....

Read More
Insights from Accenture on Finance Transformation

Insights from Accenture on Finance Transformation

How can the financial planning and analysis (FP&A) function provide more value to the organization?

Get the answer to this question, and insights on finance transformation from Accenture in an upcoming webinar.

With pressure to improve planning effectiveness, deliver business insights, and provide direction on how to reach the organization’s goals, what best practices exist to effectively address these challenges head on?

Join our webinar on May 10th where Matthew Aldrich of Accenture provides answers to these questions and shares lessons learned and best practices on transforming the FP&A function based on his experience helping CFOs and Finance executives around the world

During this event, attendees will learn:

  • How to align Finance to the needs of the business
  • Best practices on transforming Finance to a trusted business partner
  • Specific real-world customer examples

To learn more, register for the webinar here.

Register for the Webinar

Related Posts

All Posts
From the Classroom to Any Room: 4 Ways to Reimagine Training

When the pandemic forced us to rethink our in-person trainings, we also made them better. Here’s how we did it, and how you can get your certification remotely....

Read More
All Posts
How the Boston Red Sox Modernized Finance with Planful: Tim Zue, Boston Red Sox CFO, on the Being Planful Podcast

%%excerpt%% Learn how the Boston Red Sox hit a homerun with Planful and transformed Finance into a modern, efficient team....

Read More
All Posts
How the Pandemic has Changed Everything—and Nothing—for the Office of Finance

If you would have asked me six months ago what the biggest challenge facing finance is, the answer would have been easy: disruption. Market volatility, changing regulations, evolving business models, emerging competitors — you name it, finance has to deal with it.  Then along came COVID-19, and to say it took the meaning of disruption ....

Read More
Stop Abusing Excel for Workforce and CAPEX Planning

Stop Abusing Excel for Workforce and CAPEX Planning

Two of the critical planning processes that feed into the operating expense planning process are workforce planning and capital expense (CAPEX) planning.

For many organizations, staff compensation is the largest part of the expense budget.  And getting CAPEX planning right can have a big impact on depreciation expenses and cash flow.  Planning for these expense categories requires a great level of detailed and sensitive information.  Yet many organizations rely on error-prone, unsecure spreadsheets, and email for handling these critical planning processes.

Register for the Webinar

Leading organizations, however, are moving to cloud-based planning platforms to support these processes.  These platforms automate data collection, accelerate workforce and CAPEX planning, and better align finance and operations while ensuring the security of this sensitive information.

Workforce and CAPEX Planning: Vital Components of the Budgeting Process

Workforce and CAPEX planning are crucial components of the overall budgeting process.  They involve two vital assets: human and physical.  Without either, no company could function.  And both planning processes require a great deal of detailed data to perform accurately.

Let’s take workforce planning as an example.  While some organizations perform workforce planning at a very summarized level, accurately forecasting workforce expenses requires a more granular approach.

Workforce.jpgThe starting point is to collect data regarding existing staff – including their salaries, benefits, and any other compensation – and deliver this to line managers, who can then perform departmental workforce planning.  Managers will then apply annual salary increases, bonuses, and other expected compensation changes for the year.  Managers will also need to enter the same information regarding expected new hires.  Then they need to consider terminations, transfers, or other staffing and compensation changes to arrive at their annual salary and compensation budget.

CAPEX planning follows a similar approach.  The starting point is to collect all the details regarding existing assets and depreciation, and make that available to line managers.  Then managers can add expected capital acquisitions, retirements, and transfers of assets to calculate their depreciation expense for the year.  The output from this process also informs the cash flow plan of the organization.

In both cases, accurate planning relies on collecting very detailed and sensitive information, making it available to line managers, then collecting the data and aggregating it into a corporate view of workforce and CAPEX plans, which then feed into the overall financial budget.

Getting both planning processes right is critical to having an accurate forecast of compensation, benefits, recruiting costs, and onboarding costs, as well as new capital expenditure requirements.  Errors caused due to mis-keying of information or bad calculations can have a material impact on the overall expense budget.  Knowing all of that, it’s hard to believe organizations continue to rely on spreadsheets and email to manage these processes. 

Spreadsheets: The Wrong Tool for Workforce and CAPEX Planning

The pitfalls of spreadsheets for corporate budgeting and planning are widely known.  And while many organizations are moving from spreadsheets to purpose-built planning applications, many continue to rely on spreadsheets to manage critical processes, such as workforce and CAPEX planning, which feed into the budgeting system and process.

But there are many issues and risks in continuing to use spreadsheets for Workforce and CAPEX planning:

  • Difficulty loading historic data from other systems
  • Users make copy-and-paste errors
  • Users don’t always manually enter data correctly
  • No security around confidential information
  • Version control issues
  • Difficulty in consolidating multiple spreadsheets

Stop Abusing Excel – Use the Right Tool for the Job

So if spreadsheets aren’t up to snuff for workforce and CAPEX planning, what should you be using instead? Leading organizations are adopting cloud-based budgeting and planning solutions, as part of EPM software, that make the workforce and CAPEX planning process significantly easier and faster.

What are the advantages of using cloud-based EPM software for workforce and CAPEX planning?  Here are a few:

  • Automatic integration of detailed data from others systems – such as Financial, HR, and Fixed Asset applications – whether they are on-premises or in the cloud.
  • EPM software standardizes workforce and CAPEX planning processes and assumptions across departments and divisions
  • Pre-built templates enable fast deployment and easy collection of data from line managers
  • Reduction of errors and improved accuracy of workforce and CAPEX planning information
  • All the planning data, and detail, is in one place – users don’t need to waste valuable time and energy hunting down information
  • Improved security over sensitive information
  • Fast consolidation of planning data and reduced planning cycle time
  • Extensive audit trails – everything that users do is documented

Workforce and CAPEX planning no longer need to be long, drawn-out processes that might not even produce accurate results.  Cloud-based EPM software not only shortens the time you spend on workforce and CAPEX planning, but also produces results you can trust. To learn more, register for our upcoming webinar: “Stop Abusing Excel for Workforce and CAPEX Planning.”

Register for the Webinar

Related Posts

All Posts
Continuous Planning for Business Advantage: Rob Kugel of Ventana Research on the Being Planful Podcast

Ventana Research analyst Robert Kugel talks about leveraging the power of Continuous Planning for a business advantage....

Read More
All Posts
Make Cash Management a Competitive Advantage

When FP&A increases speed, flexibility, and visibility into cash flow, every corner of the business is better positioned to win....

Read More
All Posts
What Every Human Resources and FP&A Department Can Do To Strengthen Their Working Relationship

Melissa Dreuth, Senior Vice President of People and Culture at Planful, talks to her counterparts in the Finance team every day… and looks forward to it.  “Human Resources – also referred to as People Operations – tends to either love or hate the Finance department. Personally, I absolutely love my Finance colleagues.” And while the ....

Read More
What’s New in FP&A in 2017?|Planful

What’s New in FP&A in 2017?|Planful

The Financial Planning and Analysis (FP&A) function of Finance is clearly becoming a critical piece in many organizations.  And with the fast-changing and uncertain environment most organizations are operating within, this is a challenging time for FP&A executives and professionals.

I recently connected with Brian Kalish to discuss the latest trends in FP&A.  Brian is an FP&A consultant with over 20 years of experience in Finance, FP&A, Treasury, and Investor Relations.

Most recently, he was the Executive Director of the Global FP&A Practice at the Association for Financial Professionals (AFP).  From 2008 to 2015, he had responsibility for Corporate Finance, Risk Management, Capital Markets, Investor Relations, FP&A, Accounting, and Financial Reporting.  Prior to joining AFP, he held several Treasury and Finance positions with the FHLB, Washington Mutual/JP Morgan, NRUCFC, Fifth Third, and Fannie Mae.

Here’s what he had to say.

John:  Brian, thanks for taking the time to chat with me.  What are some of the key planning challenges for organizations in 2017?

Brian:  You’re welcome, John.  Thanks for the opportunity.  There are so many challenges in corporate planning at this time.  Let’s start with the volatility and uncertainty in global politics, world business, economics, and regulations.  The ability to effectively plan and forecast has never been more important.

Brian Kalish.jpgThen factor in the capacity in FP&A.  While there has been investment in FP&A functions over the past few years, most organizations seem to be cutting back now, trying to maintain headcount and costs, do more with fewer resources.  That means FP&A needs to become more efficient – look more closely at how it spends its time.  Put more focus on planning and analytics, less on data collection.  And they need to be more agile, get better at planning, forecasting, and reacting to change.  Think of the analogy of an ocean freighter vs. a power boat, which can change direction quickly.  How do we get better at adjusting operations plans and resources in response to new market opportunities and risks?

Technology also continues to challenge us.  Much of what’s in place in many organizations today is outdated.  Think about ERP systems, Excel spreadsheets, and legacy planning applications – they were not designed for today’s world.  FP&A needs to be able to adapt better to the rate of change in the market.  We need to re-evaluate and upgrade business processes, the technology that supports the processes, and the skillsets needed to succeed.   

John:  Agreed, these are challenging times indeed.  How are leading organizations responding to these challenges?

Brian:  The biggest trend I see is the continued push to move low-value activities out of FP&A.  That can mean shifting them into other parts of the organization, using shared services centers, consolidating, or even offshoring low-value tasks.  Can standard variance analysis be outsourced?  Let FP&A staff focus on more complex analysis, forecasting.  Organizations need to audit what they are doing, see if all of the tasks they are doingare still necessary.  For instance, survey stakeholders and stop producing so many reports that no one reads.

Companies are also looking at new technologies that can help FP&A get more efficient.  It can be difficult to upgrade systems when people are so busy.  It’s like changing the engine on a moving car.  But we need to make the investment to get ahead, and we can’t afford to wait.  Business and technology are changing.  FP&A needs to move with it.

Q3_2016_7_Trends_in_Finance_FINAL-3.jpgAnother trend is FP&A moving more to communications and collaboration, more line of business support.  We need to understand internal and external customers, give FP&A staff more time with their internal customers and maybe even customer-facing exposure.  For instance, letting them work shifts in a retail operation to get a better sense of how the business works.  

John:  Wow, there is certainly a lot going on.  How has the role of the FP&A function changed or expanded in recent years?

Brian:  In general, I think the biggest shift has been to be more forward-looking vs. backward-looking.  Improvements in technology have made it easier to report on the past – now we need to focus more on the future, project key trends forward.  It’s not about being perfectly accurate, but thinking about what can happen, doing more what-if scenario planning and modeling.  Companies need to get better prepared to react to changing market conditions.  They need to have a game plan for different scenarios – such as a drop in oil prices, a spike in interest rates, or an increase in other commodity prices.

I see FP&A automating routine tasks, putting more focus on value-added analysis.  A good practice is to understand where FP&A stands on the maturity model.  This can range from basic management reporting to annual budgeting, rolling forecasts, predictive modeling, and enterprise-wide business support.  There is more focus on being a better business partner, and better advisor to LOB executives.  Help them make decisions and evaluate new opportunities.  

John:  What new skillsets must organizations have in FP&A to succeed in today’s environment?

Brian:  The table stakes are still basic knowledge of Accounting and Finance, and the tools of the trade.  But killer Excel skills aren’t enough.  FP&A staff need to be more technology savvy, know how to use the latest tools and techniques.  They also need to understand the business, be able to communicate as well as collaborate with and advise LOB executives.  This could be an embedded model or an assignment model – but FP&A needs to become part of the LOB teams it supports.  Collaboration and communication skills are key, including writing and presenting information and packaging it for key audiences.

Qlik_Hi_Res_Dashboard_2.pngThis can be a blind spot in some Finance groups.  Grids of numbers don’t make sense to everyone.  You need to understand how the audience thinks and package information accordingly.  Check out the IBCS – International Business Communication Standards.  This has great tips on how to present and format information for key audiences.

John:  Thanks for that tip.  You mentioned being more technology savvy.  What new technologies should FP&A departments be considering to be more effective?

Brian:  Some of the key ones are advanced analytics and forecasting tools that are being used more readily across industries and geographies.  Cloud-based planning solutions are also becoming more popular, although I still hear some fear about control and security over data.  Small and mid-sized companies embraced the cloud sooner, but now large companies are seeing the benefit.  Some startups, such as Planful, jumped in early, but large vendors are finally on the bandwagon after lagging the market.

Mobile technology is now moving from personal into business use – such as in travel and expense management.  In FP&A, mobile technologies are being used mostly for consumption of reports and KPIs.  Mobile can also be used for workflow and process management, such as budget reviews and approvals.  But there’s a great opportunity to arm people with the right information, at the right time, in the right format.  The key is to have a single version of the truth that gets pushed out to LOB managers – and that’s where the cloud excels. 

Artificial intelligence is also coming into play.  This includes machine to human, machine to machine, and robotic process automation (RPA).  This can help shift manual tasks off FP&A’s plate, automate more, and let humans take on more advanced tasks.

John:  There is certainly plenty to take advantage of out there.  What steps can FP&A teams take to more forward?

Brian:  My recommendation is to audit your skill sets, your FP&A process maturity, and your technology capabilities.  See where you stand, and identify areas for potential improvement and ways to increase productivity.  What technologies people use in their personal lives shouldn’t be more advanced than their work systems.  Look at where the world is going, and look for ways to get ahead – and stay ahead.  Maybe you can find opportunities to leapfrog the competition.  Be curious, and look forward.  The status quo won’t cut it in the future.

FP&A has huge opportunities ahead – those who succeed will be efficient, leverage the latest techniques and tools, and become more agile than their competitors.

John:  Thanks, Brian, great advice. 

To learn more about Brian and the best practices discussed here, check out Brian’s LinkedIn profile.

Related Posts

Office of Finance
Culture and Technology – Top 5 Reasons To Rethink Your Mix

We’re a technology company, obviously. Getting customers excited about our technology and how it can transform finance and evolve their business is something we love to do. In conversations with thousands of organizations over many years, we’ve noticed some clear signs indicating when a finance team needs to first focus their efforts on how their ....

Read More
Office of Finance
Top 5 Career-limiting Mistakes Everyone in Finance Should Avoid

We all make mistakes. But the expectation is that we learn from our mistakes and try to avoid repeating them. Of course, that’s not always the reality. So when mistakes tend to pop up again and again it might be time to seek out some help. For those of us in finance, mistakes can result ....

Read More
Accounting
Why Cash Is Still King

Cash flow reporting is an essential piece for any business. Planful Automated Cash Flow Reporting automates this complex process for you....

Read More
Transform Finance with Cloud-Based EPM Solutions

Transform Finance with Cloud-Based EPM Solutions

As the pace of change in business accelerates and Finance departments are asked to do more with less, many are left wondering, “How do we become more efficient and agile?

What are the risks and rewards of applying new technologies to our company’s financial processes?”  In a recent webinar sponsored by Planful, several experts discussed how cloud-based EPM platforms are helping organizations transform critical Finance processes – namely budgeting, forecasting, consolidation, and reporting.

Watch My Webinar Replay

EPM Helps Align Strategies to Plans and Execution

As all organizations grapple with how to align enterprise-wide goals and objectives amidst changing market conditions, many are seeing the value of enterprise performance management (EPM) platforms in improving alignment.  EPM platforms help organizations link their strategies and goals to their plans and execution by integrating key financial management processes:

  • Planning and modeling
  • Financial consolidation and close
  • Reporting and analytics

Status of Enterprise Performance Management in 2017

So how are organizations doing with EPM in 2017?  To get a sense of this, Planful sponsored a recent CFO survey with Argyle.  When asked, “What are your 3 biggest performance management challenges in 2017?” here were the responses:

  • 73% cited planning and forecasting in volatile business conditions
  • 67% said aligning Finance and operational plans
  • 67% said defining the right KPIs for the business
  • 50% said closing the books quickly and delivering results to stakeholders

Then we drilled into some of these topics in more detail.  When asked, “What are your 3 biggest challenges in budgeting, planning, and forecasting?” the top responses included the following:

  • 67% cited accurately forecasting revenue
  • 50% cited managing too many spreadsheets
  • 47% cited setting initial goals and targets
  • 43% cited getting participation from LOB managers

We asked the same question regarding the 3 biggest challenges in financial close and reporting, and found the following:

  • 73% cited collecting and consolidating data from multiple systems
  • 73% also cited delivering the right KPIs and reports to internal management
  • 40% cited packaging results for external stakeholders

In the financial close and reporting area, there is clearly more pain in internal management reporting than in external stakeholder reporting.

Finally, we asked what new technologies CFOs are leveraging in Finance. Here are the top responses:

  • 83% cited cloud-based applications
  • 40% cited mobile technology
  • 30% cited big data
  • 17% cited predictive analytics

It was great to see such strong support for cloud applications.  Finance is clearly becoming more comfortable with the cloud.  It was also encouraging to see the growing use of mobile technology.

Transform Planning, Consolidation, and Reporting via the Cloud

cloud-based finance.pngWhile it was encouraging to see cloud-based applications usage increasing in Finance, our experience in the market, as well as other surveys, reveal that adoption of cloud-based applications for planning, consolidation, and reporting is at roughly 25% and growing rapidly.

Why are organizations replacing spreadsheets and legacy applications and moving to the cloud?  There are many reasons, including speed of deployment, faster innovation, lower cost of ownership, and autonomy from IT.  But a big driver is also the efficiency gains on key processes, such as budgeting and planning, financial consolidation, and reporting.

For example, reducing reliance on spreadsheets and moving to cloud-based applications enable organizations to automate manual steps, accelerate Finance processes, and improve alignment between Finance and Operations by gaining more participation, ownership, and accountability from line managers regarding their plans and forecasts.   

Leveraging the Experience of Practitioners

The last segment of the webinar featured a panel discussion with Tim Brown – CFO at Motus, and Ben Tang – VP of Finance and Operations at Planful.  During the panel, both executives highlighted their performance management challenges and how they have leveraged cloud-based EPM applications to address these challenges and streamline their Finance processes. 

Here are some of the key benefits they cited from using a cloud-based EPM platform:

  • Ability to perform more iterations and arrive faster at a final budget
  • Flexibility and speed in modeling different scenarios
  • Ability to implement rolling forecasts and seed the 2017 budget earlier
  • Rapidly integrating data from multiple sources
  • Delivering more timely results to management, including flash reporting
  • Having a single version of the truth for reporting and analysis
  • Providing self-service information access for Finance and LOB staff

They also cited the benefits they achieved in improving alignment between Finance and Operations by empowering managers with direct access to information, gaining more accountability and ownership for plans and forecasts.

To Learn More

In summary, today’s market requires a dynamic approach to planning, consolidation, and reporting.  Many companies are still relying on spreadsheets, manual processes, or legacy applications, and as a result, they struggle with long, tedious Finance processes.  Leading companies are doing the following:

  • Adopting cloud-based EPM platforms
  • Putting less focus on and effort into annual budgeting
  • Using regular, rolling forecasts to update budget assumptions
  • Accelerating financial close and reporting
  • Improving Finance–Operations alignment

This leads to better business agility and overall competitiveness.  To learn more, watch the webinar replay “Unlock the Secrets to Finance Transformation with Cloud EPM.”

Watch My Webinar Replay

Related Posts

All Posts
Being Planful: Helpful FP&A Resources

Being Planful: Helpful FP&A Resources to Navigate an Uncertain World: COVID-19 Resources for FP&A Professionals - Part 41 I Planful...

Read More
All Posts
Being Planful: Helpful FP&A Resources

Being Planful: Helpful FP&A Resources to Navigate an Uncertain World: COVID-19 Resources for FP&A Professionals - Part 41 I Planful...

Read More
All Posts
Constellation ShortList™: Planful Named for Ninth Consecutive Year

Planful has been named—for the ninth consecutive year—to the prestigious Constellation ShortList™ for Cloud-Based Planning Platforms in Q1 2021. This report identifies the top planning platform vendors based on technology investment, use cases, strategic vision, customer value, executive leadership and price.  Download the Constellation Shortlist™ to see why Planful made the list. We’re incredibly excited ....

Read More
How to Align Financial and Operational Planning

How to Align Financial and Operational Planning

When it comes to financial budgeting and planning, the days of top-down budgeting, driven by Finance seem to be waning.

Taking its place is a more integrated approach where Finance and Operational plans are not created in separate silos, but in a more collaborative fashion.  So, what does an integrated financial plan really look like?  In the world of transformational finance organizations, it is one that is led by finance but created with operations as an equal partner.

It must also be highly iterative, and effective at driving well-informed business decisions. This is especially true because of the explosion of data sources available to drive business decisions. Couple that with the mission-critical planning done in areas like sales and marketing, and you see the importance of Finance – Operations collaboration.

So what are the benefits to finance organizations that embrace the partnered approach to financial planning?  Check out our on-demand webinar to find out.  Topics that will be covered include:

  • The challenges of silo-based planning and the benefits of a unified plan
  • Tips on how you can change the game in your organization
  • How modern, cloud-based EPM platforms facilitate more efficient financial and operational planning.

Learn more and register for “Change the Game With Finance and Operations Alignment.”

Register for the Webinar

Related Posts

All Posts
Continuous Planning for Business Advantage: Rob Kugel of Ventana Research on the Being Planful Podcast

Ventana Research analyst Robert Kugel talks about leveraging the power of Continuous Planning for a business advantage....

Read More
All Posts
Make Cash Management a Competitive Advantage

When FP&A increases speed, flexibility, and visibility into cash flow, every corner of the business is better positioned to win....

Read More
All Posts
What Every Human Resources and FP&A Department Can Do To Strengthen Their Working Relationship

Melissa Dreuth, Senior Vice President of People and Culture at Planful, talks to her counterparts in the Finance team every day… and looks forward to it.  “Human Resources – also referred to as People Operations – tends to either love or hate the Finance department. Personally, I absolutely love my Finance colleagues.” And while the ....

Read More
Can Audits Help Improve Business Performance?

Can Audits Help Improve Business Performance?

Internal and external audits can be painful for many organizations.  Lots of time and effort goes into preparing information for the auditors, and the goal is typically just to get a clean bill of health on the financials.

But can audits also help improve business performance?  The answer is yes, based on a recent survey done by Deloitte.  The results were highlighted in a recent article published by Accounting Today:

“The survey of 300 C-suite executives and 100 audit committee members, found that nearly three-quarters of the top executives and 91 percent of the audit committee members polled said audits of financial statements identify opportunities to improve business performance. In addition, 70 percent of C-suite executives and 79 percent of audit committee members believe that financial statement audits provide valuable business insights.”

Surprised?  I guess we shouldn’t be, given all the financial and operational information that’s collected and organized to support internal and external audits. 

Of course, most of this information could, and should, have been made available to management through their enterprise performance management (EPM) systems prior to the year-end audit.  However, if the audit report brings new insights to a new audience – and does so on a timely basis – this can certainly yield benefits.

Per Deloitte, audit insights that may prompt companies to take action include;

  • Comments about the industry and market
  • Comments on company processes and policies
  • Identification of company inefficiencies, redundancies, and risks

More companies are starting to leverage insights that auditors are capable of delivering when they use the latest audit analytics tools.

The Deloitte survey also found that many companies miss out on opportunities to improve business by leveraging insights from audits.  According to the survey, one out of every three companies rarely or never leverages the information received from financial statement audits.

To learn more, check out the article in Accounting Today titled  “Audits Improve Business Performance.”

Related Posts

Accounting
Why Cash Is Still King

Cash flow reporting is an essential piece for any business. Planful Automated Cash Flow Reporting automates this complex process for you....

Read More
Accounting
Are You Ready for New Revenue Recognition Disclosure Requirements?

The FASB’s new revenue recognition guidelines will impact revenue accounting and budgeting, but will also have an impact on reporting disclosures....

Read More
Accounting
The New Game Plan for Finance and Accounting

In this interview, industry guru Brian Sommer highlights the impact of the digital economy on Accounting and Finance and “the new game plan” that’s needed....

Read More
Rolling Forecasts – Transform Planning and Increase Business Agility

Rolling Forecasts – Transform Planning and Increase Business Agility

While the annual budgeting process is an important step in setting goals and defining resource allocations for the coming year, the pace of change in today’s business world typically makes the annual budget obsolete after a few months.

In response to this, a growing number of organizations are adopting the rolling forecast technique to transform planning and better cope with the unpredictable nature of the business world.

Rolling forecasts is a flexible planning technique that enables organizations to adjust their spending plans and resource allocations based on changes happening in the economy, industry, or enterprise.  Read on to learn how rolling forecasts can help your firm stay agile and thrive in an uncertain environment.

Your Budget May Already Be Out of Date

That budget you spent so long working on towards the end of 2016 might be completely meaningless by the end of Q1 2017. You might not have taken into account the impacts the Trump presidency would have on the economy, or the volatility of global commodity markets, or the Fed’s plan to increase interest rates.

What’s the difference between traditional budgeting and rolling forecasts? A traditional budget is typically built over the course of months, includes a great level of detail, and helps the organization set its initial financial targets and resource allocations for the upcoming fiscal year.  Actual financial and operating results are measured against the budget, and it’s not typically revised throughout the upcoming year (which is why this method is also known as “static” budgeting).

Variances between actual results and the original budget, and its underlying assumptions are explained on a monthly and quarterly basis.  And as the year unfolds, these variance explanations identify specifics about where and why actual business conditions and results differ from the original budget assumptions.

Rolling forecasts, on the other hand, provide an opportunity for organizations to project future financial results based on a combination of actual financial results, and the original budget, or updated revenue and expense forecasts.  For instance, at the end of the first quarter, the projected results for the fiscal year can be created by combining the January – March actual financial results, with the budgeted revenue and expenses for the remaining quarters.  If business conditions have changed so much that the budget for the remainder of the fiscal year is no longer valid, Finance can collect updated revenue and expense projections for the remaining periods from line managers.  These projections are combined with the first quarter actual results to create a more accurate projection of results for the fiscal year.

rolling forecast-468668-edited.jpg

A more advanced approach that many organizations are adopting is using an add/drop model over a set period of time to anticipate future outcomes. Let’s say your rolling forecast covers a period of 4 quarters. After the end of Q1, you add the 1st quarter of the next year into your forecast. Similarly, at the end of Q2, you add the 2nd quarter of the next fiscal year  into your forecast.  The forecast is based on the most current information that you have, and as each quarter passes, you revise your predictions further into the future. This method provides the organization with a head-start on budgeting for the next fiscal year, since the work is done in advance and takes into consideration the latest results and assumptions about the business going forward.

Are Rolling Forecasts More Work?

rolling_budget.jpgOn the face of it, it would sound as though rolling forecasts are significantly more work for the finance and accounting department than a static budget – you’re constantly evaluating business performance and updating the forecast.  But the reason many organizations are adopting this technique is that it allows them to more intelligently allocate, or re-allocate resources, and it makes the annual budgeting process much easier, when the time comes.  In some instances, the annual budget is dropped completely and the organization is run entirely on a rolling forecast process,

Rolling forecasts represent a commitment of time and resources, though they don’t have to sap the strength of your finance and accounting department. Organizations that use a cloud-based planning and forecasting solution, find the process becomes significantly easier and faster than collecting data manually, using spreadsheets and email.

What makes cloud-based planning platform superior for managing rolling forecasts? Here’s a list of its advantages:

  • A centralized database is used to collect budget and forecasts data so they can be rapidly consolidated
  • Browser-based planning templates are used for speed and ease of use as opposed to spreadsheets
  • User-friendly interfaces make the system intuitive for Finance and line of business users
  • No more data silos – the cloud-based planning system connects to data sources and automatically captures the latest financial and operating results managers need to update their forecasts

Roll With Market Changes and Gain Agility

When external business conditions suddenly change (such as a jump in oil prices or interest rates), managers need to be able to quickly update their forecasts and analyze the impact of these changes on their projected business results. With the planning and forecasting capabilities provided by modern, cloud-based enterprise performance management (EPM) platforms, organizations can stay agile in the face of new business opportunities or unexpected downturns.

To learn more about how cloud-based EPM platforms can help your organization transform planning and gain agility, watch our on-demand webinar:  “Rolling Forecasts – How You Can Make Better Use of Excel.”

Watch Now

Related Posts

All Posts
Continuous Planning for Business Advantage: Rob Kugel of Ventana Research on the Being Planful Podcast

Ventana Research analyst Robert Kugel talks about leveraging the power of Continuous Planning for a business advantage....

Read More
All Posts
Make Cash Management a Competitive Advantage

When FP&A increases speed, flexibility, and visibility into cash flow, every corner of the business is better positioned to win....

Read More
All Posts
What Every Human Resources and FP&A Department Can Do To Strengthen Their Working Relationship

Melissa Dreuth, Senior Vice President of People and Culture at Planful, talks to her counterparts in the Finance team every day… and looks forward to it.  “Human Resources – also referred to as People Operations – tends to either love or hate the Finance department. Personally, I absolutely love my Finance colleagues.” And while the ....

Read More