Far too many companies these days are operating under the organization format where the financial planning for the entire organization happens all within the financial department. This is a huge mistake that has led to many of the big frustrations that struggling companies are working with. Realigning your company in a way that creates better communication between all the different departments can be extremely helpful. This article will cover some of the tips for reaching this goal as set out by Alex Ortiz, Director of Product Marketing, Host Analytics and Bijal Patel, Sr. Financial Analyst, Cell Therapeutics.
Handling the Volatile Nature of Business
Big changes have always been part of the business landscape, but right now these changes are happening much faster. These changes are also far more pertinent to the way things work within a company. The following is a list of some of the big changes that can damage the way your company works if not addressed in appropriate manners:
- Technology: This is the biggest change that has happened in pretty much every market. If your company is still working with spreadsheet programs for the majority of your financial reports, then you are not adapting in the way you should.
- Buyer patterns: The market of buyers will change for the slightest reasons. Seasonal changes, political issues, shifts in the job market, and many other things can alter the way buyers purchase items and what is important to them.
- Data management: Companies are now wading through more and more data than ever before. Having effective ways to store, analyze, and optimize this information is vital.
- Business tools: There are a lot of important tools out there that are not being properly utilized by many companies. DMS technology, cloud software programs, and virtual technology platforms are all business tools that are being grossly overlooked by many companies in the business arena. All of these tools have major applications for financial purposes.
- Economic climate: In order for any finance department to work well, it has to be aware of what is happening in the national economy. This information will change what happens with the revenue, what assets are worth, and how products and services will move.
These changes can make or break what happens in your company based on how you understand and alter the way you do business in response to these changes.
Creating the Right Financial Arsenal
Communication is really what is missing in most companies. In order to really align all the company departments with the financial strategy, communication is necessary. The experts in the industry feel that in order for this communication to exist, the new business technologies need to be better utilized. The following are some of the best business tools that can be harnessed to create the right climate for this kind of strategical alignment.
The way the cloud stores information makes it possible for all parties to acknowledge the pertinent information and get engaged in the conversation. The existence of a virtual platform for networking, file storage, and communication has completely changed the way workflow is handled in companies. The open nature of the cloud technology makes the alignment of all department heads with the financial planning meetings far more effective.
Data Analysis Software
Big data management is a pitfall many companies are facing right now. The sad part about this is that with the right analytic tools in place, all of this data can actually be a huge tool that can boost the revenue of any company.
Optimizing the financial planning process happens best when the right information is utilized in the planning process. A good analytic software program will allow you to see what the best products are, who is purchasing your products, what weaknesses exist in your marketing campaign, where the weak links are in the work flow, and many other things.
The right program will take in all the data, organize it according to the parameters set by the financial heads, and spit out the right analytic information for you to utilize in the best manner for your company.
Incorporate Revenue Plans
Nothing is manageable about a mess of spreadsheets, especially when you stop to consider that recent studies showed that 90% of spreadsheets had at least one mistake on them. The financial planning in your company really should take into account the revenue plans as well.
There is always a very strong connection between the input of a company and the output. This means that the decisions about investments and funds allocated to different departments should be made with the projected revenue plans in mind as well.
The rolling forecast of your company will never be accurate without the alignment of the financial planning department with the revenue-related departments. Marketing, sales, HR, and many other revenue-related heads have to be involved in the financial planning in order for the right forecast to be made.