Connecticut CPA Magazine Excerpt - Financial Planning and Analysis Tools: Your Organization's Crystal Ball

By Jim Norton, GRF CPAs & Advisors

Budgeting. Planning. Budgeting and planning. Financial planning and analysis. FP&A. Projections. Models. Forecasts. Pro formas.  

These are just a handful of terms that are often used interchangeably when talking about the process of analyzing an organization's financial position. The buzz phrase that seems to resonate most with people lately is financial planning and analysis, or FP&A. 

As defined by Gartner, “Financial planning and analysis (FP&A) is a set of four activities that support an organization's financial health: planning and budgeting, integrated financial planning, management and performance reporting, and forecasting and modeling.”  

The important part to realize is this: the pace of change in the world has been accelerating for decades, long before the pandemic. If anything, the pandemic served as a sobering reminder that disruption is a certainty, and that the organizations that will come through it stronger are those with the agility to pivot, adjust their course, and blaze a new trail.  

So why is it that, according to Gartner, “only 3% of companies have strategic, operational, and financial planning processes that are fully aligned and integrated?” The answer is this: too many organizations are living in an FP&A desert. Ask any organization or firm the following questions:

• How do you budget, plan for scenarios, forecast, and reforecast in real time?
• How does your current FP&A process speak to your accounting and finance software?
• How long does it take you to handle the budgeting and forecasting process?
• How are key stakeholders kept perpetually informed of the financials they are responsible for?

More than likely, the answer to some or all of these questions will revolve around Excel or some spreadsheet tool. This approach does not scale, and if the organization or firm:

• Has even one supplemental model that supports the budget or plan numbers,
• Is managing multiple versions or scenarios, or
• Is parsing out separate Excel files or tabs to different team members only to hack them back together again later ...

then they've probably (definitely) already outgrown it. An FP&A software lets the organization be nimble so it can face and plan through any obstacle with confidence.  

So what should an organization expect from a good-quality FP&A software? At minimum, do not settle for less than some or all of the following capabilities:  

• Restricts data visibility to team members on a need-to-know basis
• Handles complex modeling/calculation needs to support budget numbers
• Offers tightly controlled, detailed personnel budgeting
• Handles multiple versions/revisions easily
• Supports forecasting
• Supports and encourages collaboration
• Synchronizes the needed chart of accounts/tags values from your accounting system
• Synchronizes actuals from your accounting system
• Performs budget vs. actual analysis/reporting and other budget reporting within the solution
• Eliminates reliance on disconnected spreadsheet tools for budgeting and planning.

The next question most people will ask is, “So, what tool should I use?” With hundreds of options available, our firm has honed in on a handful that we believe to be best in class. These solutions meet the criteria mentioned above, the costs are reasonable, and the return on investment is evident. Among the hundreds available, there are sure to be other good solutions. There are also sure to be some NOT-so-good solutions, and we're always happy to chat offline about what we think those are (and why).  

So, in the interest of keeping my word count under control, I'll wrap up with this – below are some solutions to consider. These are all cloud-based solutions that can be up and running in a week or less.  

Martus Solutions

Martus is a powerful budgeting and planning tool. It has pre-built integrations with many popular accounting software tools, and an incredibly easy import/export function if you use an accounting software that does not offer integration. The solution is simple, intuitive, and easy to use. It offers pre-built reporting, tightly and granularly controlled access, rich drill-down into detail of your actuals, and sophisticated modeling and allocation capabilities.  

Because it is fairly and reasonably priced, it is most popular among nonprofit organizations, although its functionality easily supports organizations in virtually any industry. I have yet to meet a client who saw Martus and did not want to explore it further. You can see an on-demand demo of Martus in action on GRF's website – just search for “Martus Solutions Demo.”  

AppComputing  

AppComputing boasts a growing list of accounting software integrations and offers easy import/export functionality. Look to AppComputing if you have multiple entities, complex ownership (i.e. family offices), and/or multiple currencies in the mix. That's because, on top of the intuitive and highly controlled budgeting and forecasting capabilities, AppComputing also includes a full global consolidation engine.  

This can be great for an organization that has really outgrown something like QuickBooks, but stubbornly continues to maintain multiple separate instances of QuickBooks and performs all their reporting and consolidations in Excel. Should they move to different accounting software and leave QuickBooks behind? Yes, but that's a discussion for a different article.  

AppComputing can help to bridge a critical piece of the gap and save a tremendous amount of time and effort. It lets you walk away with a more complete set of budgeted financial statements – not just the income statement, but the balance sheet and statement of cash flows, too.  

Because the solution is so powerful, some simpler organizations might steer clear of it in favor of something with fewer bells and whistles. AppComputing is very popular with software companies, family offices, and multi-national organizations, among others. Demo videos are available on AppComputing's website; you can also sign up for a 30-day free trial.

Sage Intacct Planning

Despite what the name implies, organizations may NOT have to be on Sage Intacct to take advantage of Sage Intacct Planning. Sage Intacct Planning can integrate with more than just Sage Intacct. Like the other tools discussed, this is a cloud-based solution. It offers great collaboration capabilities with granular controls and security.  

The solution is extremely intuitive and easy to use, with a bright and modern user interface. The scenario management and what-if analysis capabilities may be some of the best available in any solution on the market. It's refreshingly easy to toggle on or add a scenario, overlay the numbers you want to change, and compare possible outcomes in seconds.  

Dashboards in the solution allow you to introduce different model assumptions and see the impacts of pulling those levers in real-time, before actually making any changes to a budget or plan scenario. The agility here is truly  next level.  

As a bonus, if you are using Sage Intacct as your accounting software, the level of integration is amazing, with the ability to drill down on a budget figure in Sage Intacct and be taken directly to the details of how that budget figure was created in Sage Intacct Planning. You can see an on-demand demo of Sage Intacct Planning on GRF's website – just search for “Sage Intacct Budgeting and Planning Product Tour.”