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5 Ways to Build Confidence in Your Financial Planning Process


Most companies have, at some point, experienced the same problem when it comes to their financial planning process. After spending a lot of time and resources on gathering up data, projections, plans and project details for your budget, when the work is finally done you realize that it has expired the same day it has been printed and will now sit collecting dust until next year.

This is not how you build confidence in your financial planning process.

In order to prevent this from happening over and over, there are three main issues that need to be addressed:

  • lack of precision in strategy;
  • irregular communication surrounding process;
  • breakdown of coordination between departments.

Here are five tips to help reboot your financial planning process and prevent those three issues from occurring next year.

1. First, outline your strategy. Second, coordinate your financial planning process.

In “The Big Lie of Strategic Planning”, a Harvard Business Review piece, Roger Martin disputes the idea that putting the words “strategic” and “plan” together leads to both being effective. Instead, he argues, strategy should concentrate exclusively on how to most effectively generate revenue or realize the highest priorities. First a clear strategy must be initiated, then the annual financial planning process can begin. The financial planning process’s role is to assess the costs and resources required to achieve the goals set out in the strategy. This two-step process provides more clarity, while also aligning budgeting and planning with revenue-generating or high-priority goals.

2. From now-on, utilize rolling budgets.

Due to the nature of modern-day business, an “annual plan” is oftentimes outdated by the end of the first quarter. So, in order to build confidence in your financial planning process, you must utilize rolling budgets. Instead of being an annual activity, rolling forecasts happen in a more regular and frequent manner. Whereas annual budgets include hundreds of line items, rolling budgets solely focus on the key business drivers. While annual budgets may bog you down, rolling budgets work as forward-looking mechanisms that will serve as early warnings when your plan has veered off course.

Make forecasting a more regular occurence than yearly with rolling forecasts.

3. Engage with financial leaders throughout the year.

In order to have a successful financial planning process, you must engage with business leaders throughout the year and seek to increase your transparency and visibility. One noted way to encourage this engagement is to present better real-time visibility into analytics, trends, and results. How do you do that? Have your financial team utilize advanced technology solutions that offer a compelling 360-degree view of all aspects of the business and spotlight dashboards. These tools offer a large range of customized data and insights in real time. When your budget presentation transforms into a dynamic, sleek, real-time electronic window, business partners and associates will become more engaged in the financial planning process.

4. Incorporate key players from all teams.

Once you have put in place a dynamic rolling budget, then there is momentous opportunity to dive further into your organization and to have clearer identification about the key drivers of results and revenues — as well as issues and programs that are increasing costs or decreasing efficiency. One way to deepen engagement, build more confidence in your financial planning process, and identify more relevant data and insights is to incorporate the knowledge and expertise of key players from all teams who are on the front lines of your business or operation. By pinpointing these key players, you will have access to their hands-on insight about the challenges and opportunities they face each day.

You should be incorporating key players from every divison to assist in your financial planning.

5. Adopt an approach that ensures communication.

Just like in all relationships and major business initiatives, frequent communication is key to achieving long-term engagement and results with your financial planning process. When developing your strategy, make sure to focus on adopting an approach that ensures communication touch points throughout the year. Planning in advance when you and your associates are going to touch base encourages input and refines processes and workflows.

Remember, we are working on building confidence in your financial planning process. Start by shifting your process away from a universally dreaded annual event to an ongoing conversation. In doing so, you will build relationships and trust among your teammates, leading to a more confident financial planning process. This culminates in a better chance of your plans succeeding.

However, it may take some time to fully implement these steps. But at the start of a New Year it is important to reflect on how you can improve from previous years, and then systematically develop a new, more dynamic approach to your annual financial planning process.

No longer operate under separate planning & reporting processes. With Kepion’s Corporate Performance Management (CPM) Solution, you can collaborate on a single approach for integrated business planning. Designed for the business, by the business, Kepion’s Corporate Performance Management Software allows sales, finance, operations, marketing and HR to configure personalized planning apps specifically to how they work. Kepion’s Dashboards and Scorecards Software helps you visualize performance, plan for efficiencies and track your results. If you’d like to learn more about improving your financial planning  process with Kepion, sign up for a demo today!