Meaningful financial planning is the basis to guiding your company safely into the future. More often than not, this is easier said than done. After all, the challenges that financial managers have to face are constantly increasing. Comprehensive regulations, increasingly complex quarterly and annual financial statements, the fast pace of the markets or unforeseen events are just a few factors that complicate the creation of a meaningful forecast for your company.
And yet, the following applies: If you don't plan properly, you will quickly put your company in a bad position. We have the solution to solve this problem. With professional financial planning software, you can include all relevant aspects in your planning with little effort, identify risks and react at an early stage.
Tips for meaningful financial planning
In this article, we will show you how to achieve reliable and meaningful financial planning with the right tools. Our experts will provide you with four important tips to optimize your planning process, data quality and the amount of time required.
Tip 1: Automate your planning
Excel is still the standard solution for planning, budgeting and reporting in most companies. But you will surely experience the limitations of the spreadsheet program again and again – especially concerning the planned balance sheet and liquidity forecast.
- With Excel-based planning, there is no uniform database.
- A great amount of manual effort is required.
- Links and macros make planning non-transparent and error-prone.
- Excel is not multi-user capable.
- All these factors lead to unnecessary additional costs.
Therefore, we recommend our professional planning software with maximum automation. It enables you to implement transparent, error-free and traceable planning processes in no time. With a click of the mouse, you can see all relevant financial data. And the manual transfer of figures is a thing of the past. Preconfigured interfaces allow you to import your data automatically from the source system and validate it at the same time. You set up planning logics and planning assistants once and continue to use or adjust them in subsequent years. This way you can guide your company safely into the future.
Tip 2: Integrate your planning
Liquidity is a key variable when it comes to financial planning. However, if you only consider the liquidity, you will not get a reliable overview of the economic situation of your company. In order to successfully assess your company's solvency and stability, it is important to integrate P&L, balance sheet and cash flow statement into your financial planning.
The best way to do this is by using professional planning software. Every planning value is constantly taken into account in all areas, and you’ll be able to automatically determine how your budgetary planning will affect your P&L, balance sheet and liquidity. The financial data across all three financial statement components is completely transparent. Integrated financial planning will also enable you to recognize negative trends at an early stage and take specific measures to correct them.
Tip 3: Think in terms of scenarios
No one can predict the future with certainty. After all, markets are highly complex, new developments are constantly emerging and unforeseeable events quickly shake everything up. Therefore, it is important to not only focus on the current situation, but also to plan with different scenarios and be prepared for all eventualities.
We recommend that you simulate all best- and worst-case scenarios. With professional planning software, this is very easy. As mentioned above, P&L, balance sheet and cash flow are already fully integrated. This way, you can create as many scenarios as you would like at the press of a button and see the possible positive or negative consequences on the assets, financial position and earnings, for example.
Tip 4: Create a forecast
The conditions in your company or on the market are changing rapidly. Therefore, the traditional annual planning is no longer accurate or relevant. For a meaningful planning forecast, it is important that you regularly create a forecast during the year. To do this, you use the actual figures and adjust them to develop a preview of your operative business. However, with Excel this is a highly complex and error-prone process.
This is not the case, if you are using professional planning software. It automatically transfers all planning data into the system, error-free. With the help of the forecast wizard, you can then easily derive, compare and evaluate forecasts. You can also create any parallel P&L and balance sheet structures and generate various reports. In addition, LucaNet allows you to compare the values of the actual data level with those of the planning data level and transfer the differences to a forecast data level. The differences can be distributed in a weighted or linear fashion, which enables you to visualize the variance between planning and actual figures on an individual basis.
Keep your company on track with LucaNet
We support you in keeping your company on track in the future. With integrated financial planning, forecasting and scenario planning, you will always have an overview of all your financial data and be able to make a valid forecast for your company with little effort.
Get more tips for your financial planning
Do you want more information on meaningful financial planning? Benefit from our free information packages and get to know all the advantages of our professional financial planning software.
To give you a quick overview, in our e-book, we explain the different ways you can use our planning software in detail:
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