2022 has brought a wave of uncertainty for companies around the world. If there was one lesson companies have learned this year, it’s that they must be prepared to adapt to industry changes, economic crises, and in some cases, even a global pandemic.
With this in mind, many companies beg the question, “How can we stay ahead and prepare for these uncertain times?”
The answer: Staying agile.
Previously, finance teams focused on creating forecasts and financial plans based on historical data alone. This approach simply is not enough when considering the ulterior complexities that impact modern businesses today. Now finance teams are shifting their focus to have a more strategic approach to their financial planning and forecasting.
By focusing on scenario planning and what-if circumstances, finance teams can have a more hands-on approach to their FP&A strategy. In order to stay ahead of the game, CFOs and finance professionals are paying close attention to the latest finance trends and FP&A practices.
In this guide, we will be covering the latest trends in finance so your team can prepare with confidence moving forward.
An acceleration towards automation
From excel automation to instant data consolidation, finance teams are now starting to automate critical data processes, allowing more time for strategic analysis and business planning. By using FP&A software, finance teams can integrate all company data from their HRIS, ERP, and BI tools into a single platform. This seamless data integration allows finance professionals to quickly create forecasts and budgets while also reducing the risk of human error.
A revamp of visuals & multimedia
Gone are the days of boring pivot tables and forecasts. With this new wave of FP&A technology comes greater visualization and multimedia features. Now you can give key stakeholders and investors a modern upgrade by presenting them with contextual charts and graphs, embedded decks, pictures, videos, spreadsheets, and more. The right FP&A software will dive deep into analytics and will go beyond hard data alone. By accessing valuable context alongside your data, your team will be able to better support overall analysis and decision-making among senior management.
A shift towards adaptable & agile operations
In today's unprecedented times, finance teams must be agile to survive. The finance department has to be able to pivot at a moment's notice and adjust financial plans accordingly. This continuous course-correcting ensures that an organization sets realistic goals to meet the needs of its shifting environment.
In the coming year, FP&A teams will continue to stay on their toes and make necessary changes to their forecasts as needed. Whether managing cash flows or analyzing predictive analytics, finance professionals will serve more as strategic business partners and help senior management in their decision-making process.
An impact of predictive analytics
One of the most impactful finance trends we've seen is the shift towards FP&A software and financial planning technology. Previously, the majority of work a finance team conducted each week consisted of sifting through Excel spreadsheets, cleaning and condensing data, and manually creating future forecasts. By using scalable FP&A software, finance teams will gain valuable predictive analytics and use that information to make more accurate revenue projections and business plans.
Plus, one of the greatest benefits of streamlining the financial planning and analysis process is the time saved by finance professionals. This extra time allows the finance department to dive deep into their financial analysis to better plan for the future and create a clear roadmap moving forward. This valuable insight ultimately allows finance leaders to make better strategic decisions as a whole.
Adoption of xP&A
While finance automation is proving to be essential for an organization, collaboration is just as critical. xP&A, or extended planning and analysis, is designed to help finance leaders align strategic, operational, and financial goals. Not only does this process eliminate data silos that tend to slow down the FP&A process, but it also provides senior management with real-time data. Through xP&A, finance teams can now improve their financial forecasting, budgeting, and modeling as an entire business unit.
While xP&A can assist with better business planning, it can also help organizations avoid risks or losses connected with poor decision-making. Ultimately, xP&A helps finance leaders improve their cash flow management, support continuous planning, and improve their overall financial planning strategy across the entire organization.
Transformation from a cost center to a data driver
Previously, finance teams were viewed as the number crunchers. They had to analyze data and ensure that their company was financially on the right track to succeed. However, once teams created their reports and analysis, they would then pass on this information to senior management and let them decide how to plan for the future. Now, this role is evolving. Finance teams are taking a more strategic approach when it comes to business planning. Instead of watching from the side lines, finance professionals are now sitting side by side with CFO's and other stakeholders to help assist with the decision-making process. By partaking in more value-added activities, finance professionals can plan for what-if scenarios, cater to other departments, and better assist with future planning.
Staying ahead of the game with Abacum
In today’s ever-changing landscape, finance teams are realizing more than ever just how necessary it is to evolve their financial planning and forecasting practices. As new technologies emerge and FP&A trends begin to paint a clearer picture for the future, finance teams have to adjust their operations accordingly to serve more as a strategic partner for their organization.
If your team of finance leaders is looking to stay ahead of the curve and follow the latest FP&A strategies, Abacum is the perfect place to start. Our FP&A software simplifies financial forecasting, reporting, and budgeting from start to finish. By taking advantage of our finance automation and collaboration features, finance teams can turn from number crunchers to decision-makers and support their organization like never before.
Because let’s face it, you didn’t hire the best financial talent just for them to waste their time digging through excel sheets and manually computing data. Get the most out of the masterminds behind your finance team and empower them with a financial automation tool that supports strategic decision-making like never before. Now with Abacum, your finance leaders will be able to review and collab on critical KPIs and financial metrics with the entire organization. Our scalable FP&A platform ultimately allows you to automate actuals and forecasts while accelerating the forecasting process.
Gain actionable insights and real-time data by modernizing your FP&A approach with Abacum. If you’re interested in learning more about how Abacum can streamline your entire financial planning process, request a demo today.