Annual Planning for 2025 is Here. Are You Prepared?

Even though it happens every year, annual planning feels like a chore for most financial planning and analysis (FP&A) teams.

While every organization conducts annual planning, many treat it as a static output that’s quickly outdated and rarely consulted after the first few months of the new fiscal year. This is often due to an annual planning process that lacks clear goals, fails to create alignment between departments, and lacks adequate resources.

In this article, you’ll learn best practices to craft a winning annual plan to help your organization define and reach its strategic goals. You’ll also see an example plan to prove that strategic annual planning pays off, especially in today’s uncertain and fast-changing economic climate.

By following the best practices outlined below, you can create a clear, concise, and actionable annual plan. Then, put those practices to work by downloading our free annual planning checklist to ensure your plan is aligned with your organization’s strategic goals and that you have the resources to execute it successfully.

Annual planning is when an organization sets its goals, strategies, and priorities for the upcoming year based on the current year’s performance. It’s a yearly process that involves analyzing current market conditions, forecasting future trends, and determining the resources needed to achieve the organization’s objectives.

Think about an annual plan like a roadmap — you know where you need to go, but a little strategic thinking will help to get you there. Most organizations use actual results from the previous year to think about how the company might perform in the future.

A great starting point is to reflect on what worked or needs improvement from last year’s plan. From there, build a pathway to get your company where it needs to be.

Why is annual planning important?

An annual plan gives Finance a sense of financial and operational direction and expectations for the upcoming year. It also informs the overarching actions the entire organization needs to take to meet its goals.

Your planning efforts drive next year’s investments and focus. It also guides hiring decisions, influences market targeting, and directs product direction.

A benefit of effective annual planning is that it can help you identify organizational gaps. This means you can constantly innovate and improve how teams across your company execute — and this practice will likely keep you ahead of the competition as you consistently work towards common goals as an organization.

There are a few important considerations that any effective annual plan should take into account.

An understanding of the previous year’s performance

Before diving into planning for the new year, look at how things went last year.

Develop a detailed analysis comparing the plan to actuals to understand what worked well, what didn’t, and where there’s room for improvement. Use these insights to ground your annual plan with more realistic expectations that reflect shifting conditions and shape your goals and strategies for the upcoming year.

For example, if a marketing campaign drove significant sales, you might want to invest more in similar campaigns. On the flip side, if a product didn’t sell as expected, this is your chance to figure out why and decide whether to tweak, replace, or drop it altogether.

Business goals and objectives your company wants to achieve

Start by considering the big-picture outcomes your company needs to achieve this year. These goals might be things like:

• Growing revenue
• Launching a new product or service
• Improving customer satisfaction
• Expanding into a new market
• Increasing market share

Once you’ve identified these big goals, break them down into more specific and achievable objectives. For example, if your goal is to grow revenue, an objective might be to increase sales by 10% in a particular market. The key is to make sure these objectives are clear, measurable, and directly tied to your company’s overall strategy.

Investments required to achieve goals

Continuing the same example, if a goal is to increase sales, you might need to add headcount to the sales organization, open new offices, or expand marketing efforts to reach more potential customers. It’s up to Finance, collaborating with organizational leaders, to determine how to fund those increases with new capital, increased revenue, or cutbacks in other initiatives.

This is a balancing act, but thoughtful collaboration helps teams redistribute resources while continuous alignment ensures teams recognize the impact of these changes, investments, and resource shifts.

It’s tough to nail down the most crucial process Finance does all year. If we had to choose, we’d probably say it’s annual planning.

We’ve got a few best practices to help you get started, including who should be involved, how to measure success, and what technology you need to use to feel the maximum impact.

Involve your key stakeholders

Get the right people in the door who make the critical decisions that impact your company’s growth.

These people might include:

• Budget managers across the organization
• C-Suite executives
• Team leads across departments like Sales and Marketing

What’s important is that you include key stakeholders that represent functions across the business, not just those from Finance and Accounting.

Once you get those people in the same room, determine what’s important to their teams’ success. Knowing how they plan to meet specific goals is not enough. It would help if you also had a deep understanding of why those investments and actions are so crucial to the success of your business. This also builds in time to reflect on what worked the year prior or where teams fell short.

From there, goal setting becomes a much more straightforward process. That’s because you’ve baked in collaboration from the start — meaning you’re not assuming what a different function is working on. Collaboration makes sure you know what is essential to other departments, what resources they need to be successful in the new year, and how you and your team can help.

Determine measurements of success

Annual planning isn’t a theoretical practice — you should expect the plan to be carried out. To know if you’re meeting expectations, define how you’ll measure success. Monitoring and sharing progress with dedicated reports and dashboards is also a great way to ensure everyone is working to plan throughout the year.

We recommend expanding your reach beyond financial metrics. That’s important, but you also want to capture overall business performance, which means tracking business data from other departments like Customer Success, Sales, and Human Resources (HR).

Again, this is a big reason why collaboration with key stakeholders across the business is so crucial. As a finance leader, you know the critical metrics connected to financial performance, like profitability, cash flow, and revenue. Be sure to include relevant metrics handled by other teams, like:

• Employee headcount
• Repeat business
• Regulatory impact
• Pipeline conversion

Be sure any metric your team decides to track ties back to a strategic objective or KPI. By maintaining a single source of truth on metrics, Finance can create an action plan that allows business leaders to analyze the business landscape more meaningfully and make better-informed decisions as the year progresses.

Monitor progress throughout the year

Keep in mind that your annual plan isn’t something you create, set aside, and then hope for the best. It’s a living document; to get the most out of it, you must stay engaged throughout the year. Regularly checking in on teams’ progress is key to making sure your organization is on track to hit your goals.

• Schedule check-ins with your key stakeholders monthly, quarterly, or bi-weekly. Use these meetings to foster open discussions about your plan’s progress. Having these check-ins on the calendar keeps everyone accountable and ensures that the plan stays front and center.
• Put your metrics and KPIs to use during these check-ins. Review these numbers to gain a clear, objective way to measure performance so you do not rely on gut feelings or anecdotes.
• Be ready to pivot if things aren’t going to plan. In our current world, it’s almost an expectation that markets, customers, or other influences will change enough to force some changes in your strategy.

Your annual plan should guide you, but it’s not set in stone. This could mean reallocating resources, shifting priorities, or even revising some of your goals. The important thing is to stay responsive to what the data and market tell you.

Invest in the proper technology

The most effective FP&A teams use a cloud-based financial performance management (FPM) platform.

FPMs help finance and accounting teams track business performance, and these platforms also boost collaboration by enabling visibility and maintaining a single source of truth for data.

The trick is investing in the right tool for your organization. You want to find a dedicated FPM platform that:

• Allows budget owners to contribute quickly and efficiently
• Has built-in workflow processes to manage tasks and deadlines
• Stores comments and communications alongside data
• Leverages artificial intelligence to check for errors and boost confidence in your decision-making
• Let your teams update and revise plans anytime, from anywhere (even offline)

Plus, an FPM solution gives instant access to real-time data that’s always current. So when a change is requested or a market shifts, plans can be updated with just a click. Plans also become more credible, and the business puts more stock in the validity of those plans.

Chosen Foods was on a fast track to growth in the food and beverage industry, but its financial planning and analysis processes couldn’t keep up. The finance team was stuck in the weeds, wrestling with outdated spreadsheets that ate up hours—sometimes even days—to gather basic data.

“We were spending so much time lifting this heavy data,” says Jim Mancuso, CFO and COO at Chosen Foods, “that we couldn’t focus on what really mattered—providing timely insights to our leadership.” Jim knew something had to change.

After evaluating several FP&A tools, Planful was the clear winner. Its user-friendly interface, speedy implementation, and robust support set it apart. The finance team was up and running in just eight weeks, transforming how they worked almost overnight.

With Planful, Chosen Foods didn’t just speed up their forecasting—they revolutionized it.

“What used to take weeks, we can now do in a matter of hours,” Jim notes, but the impact didn’t stop there.

Adopting Planful has bridged gaps across the organization, empowering teams outside of finance to access real-time data and enhance their financial literacy. “Our entire organization’s financial IQ has gone up,” Jim says. When urgent questions arise, the answers are just a few clicks away, backed by solid, data-driven insights.

Chosen Foods’ experience underscores the importance of investing in the right tools and strategic planning processes to achieve business goals. Their success with Planful highlights how building an effective annual planning process empowers organizations to be more agile, informed, and aligned with strategic objectives.

Read more: Chosen Foods Raised the Financial IQ Across the Organization While Streamlining Planning and Forecasting.

Creating a successful annual plan takes more than just setting goals and hoping for the best — it requires thoughtful preparation, continuous monitoring, and the right tools to keep everything on track.

Ready to take your annual planning to the next level? Download our free Annual Planning Checklist to get started.