We hear you. If you’re used to doing things a certain way, changing direction can feel daunting and difficult. Your manual processes are familiar to you, even if they’re a little cumbersome and time consuming. When it comes to financial planning and analysis (FP&A), however, financial planning automation tools are worth considering. They can improve your working life in more ways than you can imagine.
Not quite convinced? We’ve got a list of benefits that might help to sway you. Right at the top is how automation can improve collaboration and version control. So if you’re part of a medium to large team, and worrying about who’s working on what keeps you up at night, know that there are solutions that can help you.
5 ways financial planning automation can make your life easier
Your FP&A processes probably involve several teams or departments. While your finance teams are primarily behind the budgeting, forecasting and scenario modelling you’re doing, they’re likely drawing on data from many other teams besides. Your sales department has to make the latest figures available, for example, and your marketing, HR and operations teams need to contribute their relevant information.
Automating all this incoming and outgoing data makes it much easier for different teams to work together. It ensures that everyone who needs to know about certain aspects of the work — what’s changed, what’s been updated — are in the know, and that they’re all looking at the latest version (more on this in a minute).
In addition to making your FP&A data more accurate, this increased transparency also makes everyone’s working life a lot less stressful by reducing unexpected and unwanted surprises.
2)Streamlines version control
We all know with that sinking feeling. When you spend the better part of two hours on a document only to wonder, “Wait, is this the latest version?” Or you check your inbox and find that “Report_V12” has landed while you’re working on V10. What about V11? Who has that? And what’s changed between your version and the one you’ve just been sent?
Version control can cause major — major — headaches in FP&A. And not just from an operational perspective. Working on multiple outdated versions of spreadsheets or documents can have real and serious consequences if errors are missed or introduced with every new version. These consequences can include financial loss, reputational damage, fines and legal action.
In addition to these worst-case scenarios, working on multiple versions of important documents across your company is clunky and inefficient. It slows down processes, forcing everyone to focus on time-consuming tasks (like finding the right version), when they could be focusing on the nuts and bolts of FP&A — and the long-term future of your business — instead.
Automation offers a single source of truth. This is music to the ears of financial planners, who constantly fear finding errors in their spreadsheets. Unfortunately, they have this fear because it’s regularly a reality. Research suggests that between almost 90% of spreadsheets are home to human errors.
In 2003, Canadian power company TransAlta lost US$24 million when a copy-and-paste error meant that the rows in a spreadsheet weren’t lined up correctly, and 10% of the company’s profit was excluded from an important equation. In 2012, JP Morgan was famously hit by a US$6 billion trading loss when someone copied the wrong information from one spreadsheet to another in the company’s value-at-risk model.
These are extreme examples, but they point out that even financial experts at the top of their game make mistakes. There’s quite literally no accounting for human error. Automation is the only answer.
Regulatory pressures have increased across almost every sector in recent years. Governments, regulatory bodies, shareholders and stakeholders demand that businesses adhere to stringent requirements in everything from finance to ESG, and that they’re ever-more transparent in their reporting.
Though important and necessary, these demands place added pressure on the financial teams who oversee these areas — and on the FP&A teams who use this data to assess any current or long-term impacts on the business
With effective automation systems in place, however, your teams aren’t depending on time-intensive manual systems when they conduct their compliance exercises. Rather, they’re capable of supplying accurate reporting and analytics data for internal and external audits quickly and easily, without disrupting day-to-day workflows.
Automating your FP&A processes can help to save you money — both from a human resources perspective (automation is less labour intensive) and in terms of limiting human errors (say goodbye to copy-and-pasting errors).
It can also help you to scale your projects easier than manual processes, allowing you to think of what the future may hold in increasingly innovative ways. FP&A, after all, is not just about analysing and understanding what has happened in the past, but what is likely to happen in the future — and how to leverage the opportunities and mitigate the risks that may present themselves.
With this information readily available you can timeously amend your strategy and scenario planning, and help to stimulate your business growth at every possible opportunity.
Switch to financial planning automation today
The old way might be the easy way. But that doesn’t mean it’s the best way.
In fact, if you aren’t using a financial planning automation tool — like Jedox — you could be putting the financial stability and sustainability of your business at risk. You’re also likely to lose out to competitors who have already automated their financial planning processes and, in the process, have reduced errors, improved time and cost efficiencies, and boosted their bottom line.
If you’re still a little reluctant about abandoning Excel outright, don’t worry. Jedox integrates seamlessly with Excel and other spreadsheet platforms, enabling you to use Excel on the front end, while Jedox keeps everything automated and accurate on the back end.
Curious but not sure where to start? Ask an expert for help. We’re here to help you improve collaboration, simplify version control, and spend more time focusing on what really matters by automating your financial planning. Contact Tahola for an obligation-free discussion and demo.