Not only an excellent product and an effective marketing strategy, but also a well-thought-out financial management system can be considered as the foundation of the company’s operations in a market economy. Not knowing all the cash flows combined with a lack of vision for the future is the perfect recipe for failure. How to start planning the sphere of company finances? What tools are worth using so that finances are never a coincidence, but the result of an in-depth analysis?
FP&A- what impact does it have on financial planning?
Finance Planning and Analysis, in short FP&A, is a set of four activities that support the financial condition of an organization: planning and budgeting, integrated financial planning, management and reporting of results, and forecasting and modeling. Financial planning is the basis of FP&A activities and at the same time probably the biggest challenge for many enterprises, especially those in which planning processes are still carried out in hundreds of separate spreadsheets.
Financial planning – why is it so important in the company?
A financial plan is a map for money. It shows goals for the future and puts them on practical foundations. It enables verification of current activities in comparison with the chosen direction of development. The financial plan includes investment issues, costs, expected profits and security in the event of temporary difficulties. Financial planning takes a variety of time horizons. It is not worth limiting your perspective only to the coming months, but extend your development plans to periods of several years.
Advantages of financial planning
An investment in a reliable and accurate financial plan pays off quickly. Its effects sometimes exceed the wildest expectations. Financial planning provides the knowledge necessary for effective cash flow management. Order in finances determines the reasonable disposal of resources and the definition of the vision of the company’s activities in the coming years. The creation of a financial plan and the ongoing monitoring of assets also result in the improvement of the company’s image in the eyes of potential investors.
At the same time, one should not forget about the benefits of financial planning, which manifest themselves every day of business. The plan never contains explicit scenarios for the future. Considering many possible developments and preparing for all circumstances, the management’s decisions lead to one goal – development and strengthening the position on the market.
A financial plan is the best hedge against economic turbulence. The construction of financial security is decided at the planning stage. Looking at the past and drawing conclusions from it makes it possible to better protect one’s own interests in a similar situation in the future. It doesn’t matter if you run a small or large business. The financial management strategy should become a pillar of activity of every company that thinks about stabilization and development.
Financial planning on CPM (Corporate Performance Management) platforms
Thanks to modern solutions in the field of business software, financial planning is no longer as difficult as it was several years ago. An example is the comprehensive CPM platforms, created to automate planning, analysis and controlling processes. If you want to make better use of your own resources and put your company on the path of rapid development, use tools from such tools and their implementation services provided by the Incube CPM team. This company is a business partner of IBM, OneStream, Lucanet, and CDM (Insight Software) in Central and Eastern Europe, helping local business entities to digitize planning processes.