Budgeting step 5 summary

• Senior leadership reviews all budget deliverables holistically.
• Senior leadership analyses a range of scenarios, risks, and outcomes to agree upon a final budget.
• Business units begin executing on their plans promptly.

The conventional way: A best shot at a best guess

Leading up to the final approval meetings, the Financial Planning and Analysis Manager is tasked with performing hurried, last-minute manual spot checks of the departmental income statements rolling up into the total company income statement. As you have probably gathered by now, it is the same story repeated over and over—Finance gets stuck performing manual checks to make sure sums and balances tally. Barely having enough time to ensure that all the details are in order, little or no time is left for value-added activities or discussing the rationale behind the submitted figures.

Since the process has been conducted largely as an arbitrary finance-driven exercise, the final budget bears little resemblance to commercial reality. The detail is often buried in layers of spreadsheets, and can be recovered only after extensive enquiry, which no one has sufficient time to undertake. Additionally, scant time is available to present and discuss a range of alternative scenarios. The final budget approval discussion is often based on only one or perhaps two broad scenarios, leaving companies exposed to business risks that have not been properly accounted for.

1. Work from a single screen, not multiple workbooks. Anaplan is a Connected Planning solution that has the capability to display your budget in any view you wish, including overall company, entity, department, cost centre, GL code, region, employee type, product, or service. Additionally, you can apply multiple currencies, alternative scenarios, or any other dimension, all from a single screen. This is a powerful tool for time- and attention-starved managers and executives. There are no restrictions or limitations on the ways you can slice or dice your data.

2. Lead dynamic discussions, anywhere, on any device. Anaplan customers often make tablet devices available to senior leadership in the boardroom to enable a dynamic discussion, where they can analyse a range of scenarios, risks, and outcomes, leading to agreement on a final budget based on high-quality shared information, generated in real time.

3. Strengthen your departmental relationships. As the budgeting process concludes, Finance has cultivated relationships and gained richer perspectives, empowering them to become authentic business partners rather than heads-down number crunchers.

4. Start thinking about plan execution. The accelerated time in approving total company and divisional targets gives time back to business lines that they can use to proactively execute on their plans, producing further iterations as business events occur. This is also a very good time for departmental and business line managers to verify they have their best- and worst-case scenarios covered.

Give managers pride of ownership in the numbers they own Annual budgeting using a Connected Planning solution is a much more collaborative process than the legacy spreadsheet-driven process, giving departmental managers greater ownership and buy-in for their numbers. By owning the numbers, the likelihood of agreed upon company targets being met increases vastly, and can later be validated in forecast accuracy measurements. Furthermore, proper managerial controls can be established to assign accountability, not blame.

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