5 Tips for Better Planning and Budgeting in 2021

  • Industry News
  • Netsuite
  • News

As we begin to settle into the new calendar year, it’s hard to resist the temptation to look back on 2020 where our financial planning and analysis teams were at the forefront of navigating us through what will go down in history as one of the most unprecedented years of all time. Overstretched and often pushed to the limit, FP&A teams were relied upon to provide quick insights into forecasts, operational performance and data-driven answers to make important decisions, with many still relying on shareable spreadsheets to support this. While Excel remains the ‘Worlds most used productivity’ tool, eventually business’ data requirements outgrow Excels ability and the tool can quickly become an obstacle that holds the business back.

Businesses will need to reflect and use their experiences from 2020 to realise that the excuse of ‘that’s how we’ve always done it’ will become the crux in holding them back. With the dramatic shift in the economy, the importance of scenario planning and forecasting has never been more vital.

So how do businesses move forward? It’s simple. They need a flexible approach to their planning and budgeting processes.

Here are our 5 tips for better planning and budgeting in 2021.

1. Don’t settle. Take the leap.

Budgeting in Excel can be time consuming, contain several manual steps and can require collaboration from multiple sources. This process is usually broken down into:

  • Downloading results from the financial system
  • Copying and Pasting the data into the desired format across multiple excel files
  • Rollin up that data
  • Updating Formula and links
  • Building revenue
  • Expense projections
  • Updating Forecasts
  • Creating actual vs. budget reports
  • Delivering files and reports to the business.

This process is not only manual and time consuming but has the risk of containing multiple errors and inaccurate data. The files are difficult to update in real-time and changes required can become confusing.

Organisations and CFO’s rely on getting the right numbers, and errors reduce their confidence which could lead to misguided decisions. Through investing in a budgeting software that is purpose-built to help organisations make the budgeting process simpler and more efficient and bring together systems and stakeholders in one controlled environment, manual data entry can be eliminated, and you’ll have fresh accurate reporting at your fingertips.

2. Rolling forecasts are the future

Rolling forecasts have been a ‘trend’ in the financial world for a while, but now is the time to adopt this trend instead of reading about it. This technique enables teams to have greater flexibility in their planning and budgeting process. A flexible budget that takes into account performance under alternative what-if scenarios will serve your business better than one that ignores the future and invests too much time detailing the budget based on what happened in the past. Although no one could have predicted the events of 2020, having the ability to forecast 6-12months into the future gives businesses the agility to better allocate resource in changing market conditions. Through having these predictions in their back pockets, businesses can manage investments or financing determined by available cash flow.

Through leveraging rolling forecasts, your business will gain greater visibility into business performance making it easier to meet your business needs in both the short term and the long.

3. Reduce your budgeting cycle time

According to BMA Group planning and budgeting can use up to 10 to 15 percent of a company’s time, along with 5-8 month to complete the full cycle in larger organisations. Budgeting time can vary dependant on business size, but one similarity all businesses share is, a planning cycle that takes too long, means you are trying to predict events that are too far in the future. To remain relevant to current conditions, your budget should take no more than 30days.

4. Partner with analytics

In a world where data and analytics is becoming essential in all areas of the business, your FP&A teams should be at the forefront of this adoption. Now more than ever, real-time insight is the key to help the management team make the best decisions possible or even data that can suggest what that decision should be, based on all the information available. Through using analytics technology, Accountants and Finance teams have an opportunity to lead their organisations to better business decisions driven by insights from analysis of big data, rather than following the familiar pattern of reporting on past events.

5. Choose the right tech

Most of the challenges in the budgeting and planning process stem from using the wrong tools. Businesses rely too heavily on multiple Excel spreadsheets that are difficult to track and notoriously poor for collaboration. Quality Financial Planning and Analysis software can help professionals centralise budgets, plans and forecasting, as well as dispense real-time insight. Through enabling your finance team with the right tools, you provide them with the power to deliver the benefits of predictive and prescriptive analytics, all while leveraging the best tools and methodologies to place themselves and your business in a better position to thrive in times of transformation.

In our latest eBook, you’ll discover your checklist for implementing planning and budgeting tools to enable your teams to spend more time understanding and analysing business trends and drivers of performance.

The best planning and budgeting Software for any size business.

With NetSuite planning and budgeting you have the opportunity to reduce your budgeting cycle times by up to 71% while producing more accurate projections. This intuitive software provides a powerful, yet easy-to-use-and-deploy budgeting solution. Utilising pre-configured data synchronisation with NetSuite’s general ledger, your financial data is automatically pulled from NetSuite into the budgeting tool, manual data entry is eliminated, you refresh reporting at your fingertips and there is no need to worry about who got what data and when. What’s more, NetSuite Planning and Budget Software facilitates both company-wide and departmental financial planning with modelling capabilities, approval workflows and reporting within one collaborative scalable solution.

Want to learn more?  Our Datasheet addresses the variety of financial, sale, contractual and operation planning use cases across multiple industries.