Where Does FP&A Fit Within a Scalable Business Model?

Many finance departments, however, were not built with scalable business processes in mind. Relying on spreadsheets and manual processes, they can only collect and aggregate data.

Growth is expected in every business. But today’s investors, boards of directors, and CEOs are no longer satisfied with regular growth. They want scale.

Many finance departments, however, were not built with scalable business processes in mind. Relying on spreadsheets and manual processes, they can only collect and aggregate data.

That’s not always a problem for a company in steady-as-she-goes mode. But what if you’re thinking about an initial public offering, an acquisition, a new market segment, or a new subsidiary? That’s when things get complex very quickly. Suddenly the trusty spreadsheet you’ve been using is like a hammer—when what you really need is an automated nail gun.

Watch the Webcast, “How SaaS Companies Model Growth: Case Study with CallidusCloud”

Not only that, but finance is asked to spark scalable growth by coordinating and providing an accurate forecast. However, according to the Adaptive Insights CFO Indicator report, 45% of CFOs say their topline forecasts are usually off by 7% or more.

Too many sources, not enough time

Why are forecasts so far off? One problem is the sheer volume of data. In that same report, 41% of CFOs say their teams manage data from 3-5 sources, while 47% still manually aggregate data from disparate source systems. As a result, they’re spending so much time just trying to collect the data and get it to be apples-to-apples that they don’t have enough time left for the in-depth analysis needed to create an accurate scalable forecast.

To complicate matters, closing the fiscal books can take so long that, after processing the final general ledger entries and producing the fiscal month-end report for the C-suite, the next month’s cycle begins immediately. Again, there’s little time for analysis or to implement progressive corporate performance management (CPM) methods.

More scale, less fail

For finance departments looking to support scalable growth, the answer is cloud-based financial software designed with scalable finance in mind. Using financial software to automate data collection, facilitate collaboration across departments, and simplify reporting lets you put in place a process that’s as robust at $1 million a year as it is at $10 million, $100 million, $1 billion, or more.

But finance can do more than just prepare to support rapid growth. It’s uniquely positioned to drive rapid growth. By using powerful, flexible software, finance can create driver-based rolling financial forecasts that allow the company to react in real time instead of once a quarter, keeping it agile and on track. This can provide frequent refreshing of the rolling financial forecast with a planning time horizon well beyond a fiscal year end. The result is a pro forma income statement and balance sheet including cash flow projections far into the future that can alert the treasury function if it will have surplus money to invest or need to borrow.

More time for analysis

In fact, the greatest driver of growth often starts with a simple “What if …” Finance departments using financial software can quickly model a variety of scenarios with more accuracy, detail, and speed than a spreadsheet can handle. Financial software can also allow CFOs to instantly visualize data in dashboards and reports to accelerate insights. The result is a finance department that can spend less time collecting data and more time on the strategic analysis and decisions that drive growth on a massive scale.

Find out more about finance processes that are built to scale.

Share this: