This is an idea you can file under “maybe not intuitive” but it turns out that sometimes a key motivation for implementing a planning solution is to improve financial consolidation and reporting.
Modern financial planning or CPM solutions (and there are several good cloud-based options today) streamline the creation and updating of integrated budgets and forecasts. They reduce the risk and effort inherent with spreadsheet-based modeling. The better planning solutions also let you load balances from your accounting system for routine reporting of actual results and variances, and enable you to automate that process.
Many growing companies struggle with consolidating their financials and producing financial statements each month or quarter. Sometimes their general ledger system doesn’t make creating financial statements easy, or they have subsidiaries that use different accounting software or have different charts of accounts. The challenge is compounded in international companies that have subsidiaries using different currencies. For these reasons and others, financial consolidation and reporting can take significant time and keep Finance staff from the analytics and planning they should be doing more of.
Why not consider getting a modern, robust, cloud-based planning system to solve these issues? Some of the clients we work with tell us that integration of financial data from multiple entities or ledgers and creation of corporate financial statements are actually among their top priorities for a new planning system.
At Analysis Team, we implement Workday’s Adaptive Planning, which includes ways to load general ledger balances, even from multiple entities, to produce financial statements. In situations where the elimination and consolidation process is more complex, Adaptive offers an add-on consolidation module. However, for many mid-sized companies the native functionality of Adaptive Planning is sufficient.
After your actual financial data is integrated, you get the additional benefits of loading into the system (and eventually creating) your annual plan and monthly/quarterly forecasts to do variance reporting, and producing dashboards to keep senior staff and functional managers apprised of business performance on a real-time basis. Adaptive Planning is a solution you can initially implement in a simple way to get immediate value then extend later in future phases to address other needs.
Tackling financial consolidation and reporting first is a great way to get fast value. It will free up the time of your Finance staff to then leverage the solution to streamline and elevate your planning. Maybe not intuitive at first, but logical!