It’s time to consider a new approach to Planning and Reporting for next FY

At bi5 Solutions we consider ourselves very lucky to be here in WA, where we have (so far) largely dodged a bullet from the COVID-19 crisis. However, after watching Four Corners on the ABC recently it’s clear that a lot of people are thinking that the worst has yet to come in terms of the impact on businesses. Like it or not we are still just a small part of the country and, even though we produce a lot of revenue from our mining, we are not financially isolated or insulated from the rest of the country or indeed the world. This is why there is now so much more focus on budgeting, planning and forecasting.

The government intervention and stimulus packages, like the cash-flow boost, Job-Keeper, and the debt holidays from the banks and other such measures have provided much needed support for businesses in the short term. However according to the reports this has somewhat hidden the real impact of the COVID-19 crisis. If it continues for an extended period of time and we have to say, nobody knows when things will change and indeed if they will ever get back to anything like the way it was before, then consequences are not very good.

The domino effect of business collapses on the scale they were presenting as a possibility is very sobering thought.

Whilst the program presented a bleak picture, we, as business leaders, have to soldier on and do everything we can to make sure our organisations do everything they can to continue to operate in the best possible way.

More accurate, flexible and timely, budgeting and planning is now more important than ever

At bi5 Solutions, we are getting more enquiries and requests than ever before from CFO’s and other executives about better ways to plan, report and analyse their operations. It was OK to rely on spreadsheets and old processes when the budgets and forecasts and the monthly reporting was viewed by many as a chore rather than a vital aspect of the business. Now everything is changing at a rapid rate and all of a sudden there is the need for better, more accurate, flexible, and timely, planning and reporting, and it can’t, or more to the point shouldn’t,  be done with spreadsheets.

In a recent article from McKinsey (link here) they were basically saying now is the time to re-think the planning processes for next FY’s Budgets. The article, which was obviously targeted for the US market, was published in September and suggested they should get ready for the next Financial year’s budget. As we enter Q4  it is cutting it a bit close to be making any major improvements or changes to budget processes for the upcoming calendar year.  In Australia however we do have time to rethink and change and improve in time for the 2021/22 Financial year, if we start to do something about it now.

Over the last 6 months a lot of organisations have been recalibrating budgets and forecasts in the best ways they can, mainly because they didn’t have a choice. But in getting ready for next years budget period there is a choice. The choice is between leaving it as it is and hoping for the best, or look to implement a modern, integrated Planning and Reporting solution.

Combine your disparate data for improved decision making

A lot of our enquiries are about integrated reporting and analysis, from companies with many disparate data sources within their businesses. The various systems they have in place don’t ‘tell a story’ or give a complete picture of what is actually happening within the business. However whilst having visibility of what has happened, and is happening, in the business is a step in the right direction, using that data as the basis for what-if analysis and scenario planning is key in the decision making process.

The data you report on is most commonly the same data used to start your budgets and forecasts, so it makes a lot of sense that they should be in the same place.

Every system or application within a business will in someway be connected either directly or indirectly and usually it all comes together at the top, in the office of Finance. If you are a commercial operation its about making profit, if you or a NFP it’s about not making a loss. Either way it’s about efficient and effective operations.

Modern budgeting and reporting systems were once the domain of big business with deep pockets. Over the years they have evolved dramatically to the extent there are now options available to suit a budget or business of any size.

Now is the time to start planning to implement better planning and better reporting systems and be prepared for next financial year.