Whew, it’s over! Yearly financial planning, that is. And many corporate finance teams are breathing a collective sigh of relief. You can put those challenges of pushing and pulling budget data from your ERP system behind you, at least for another few months or so, right? Budgeting is out of sight, out of mind for now.
Not so fast. The reality is that now is the perfect time to look at ways to make the planning process―and your business―more agile and efficient, instead of denying the pain that will come back to haunt you in the 2017 budgeting season. Perhaps monthly forecasting instead of yearly budgeting is an attainable goal with the right technology. Just asking some basic questions―where have we been, where do want to go and how do we get there―can shed light on future options.
What Just Happened in Your Current Process?
To create your 2016 budget, the first step was most likely to pull the 2015 historical actuals from your ERP system and then painstakingly cut and paste the required information into Microsoft Excel, the financial professional’s tool of choice for data manipulation and analysis. Excel is a favorite because of its familiarity and flexibility compared with standard reporting tools from ERP systems like SAP and Oracle, which can provide tons of poorly formatted data that is difficult to meaningfully absorb. Unfortunately, this transfer to Excel is usually a time-consuming and manual process.
For example, if you’re an SAP user, you copy actuals for all cost centers into Excel and format them, after which you probably distribute the appropriate planning template workbooks to the company’s various cost centers and wait for their proposed budgets. As these budgets trickle back, you likely combine them into a centralized workbook that will simplify the manual transfer back to SAP. Again, it’s a process with many steps, and prone to error. It can also take weeks or months to finalize budgets, making it a yearly task and eliminating the chance for more frequent forecasts.
With all these frustrations, you have yet another one: The data you are now using in your Excel models is static, but business conditions change every day.
What Could Your Planning Process Look Like?
In February 2017, what if you could easily overwrite your 2017 Excel-based budget with January actuals and produce a monthly rolling forecast? What if you could plan as many times per year as needed based on market conditions? Could you make faster, more accurate business decisions?
Monthly forecasting is the Holy Grail of financial planning, but it’s a dim reality for many companies. ERP vendors offer complex planning solutions that can facilitate this―like BPC for SAP―but they come with a high implementation cost and steep learning curve. Once all is said and done, it could take a year to push “play” on these systems, and users would no longer have their favorite planning environment: Excel.
How Can Your Planning Become More Agile in Excel?
If you’ve decided that a planning solution like BPC isn’t yet a fit for your company, or there are planning areas not addressed by your current BPC environment, options exist that allow you to remain in Excel while attaining your goal of monthly planning and forecasting. Excel-based tools allow you to report actuals, distribute the reports, and then upload the budget with a mouse click each. You are instantly accessing and updating with live data, not an outdated static copy. And you’ll be in Excel, so virtually no training is required, and neither is a data warehouse.
With these simple tools, Excel automates your financial reporting, report distribution and planning processes, taking it from multiple painstaking steps to two or three efficient steps. Because it is so easy to pull, distribute and push the data, monthly forecasting in Excel can become a reality.
The 2016 annual financial planning pain and suffering may be fading from memory, but 2017 is looming just around the corner. It could be easier than you think to break the short-lived planning “cycle of denial”. Excel-based reporting and budgeting tools offer a user-friendly and cost-effective option for achieving the business agility you need: easier, faster, and more insightful planning within the business user’s tool of choice.