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Financial Budgeting, Planning and Forecasting

In Proformative's recent webinar "Financial Planning, Budgeting and Forecastin

In Proformative's recent webinar "Financial Planning, Budgeting and Forecasting," financial software firm Host Analytics provided information on how firms can plan effectively in the current economy and leverage technology to improve results. 

Role of finance

The role of financial professionals in corporations has changed over the last decade or so, according to Rob Frascone, a solution consultant at Host Analytics. He noted that when he worked in corporate finance for a publicly-traded software firm during the dot-com era, his department was too focused on "closing the books" and preparing reports for the Securities and Exchange Commission (SEC) to invest any time into analysis or alternatively budgeting and forecasting.

In the current economy, finance departments have become increasingly proactive and have become more of a strategic partner that contributes to company decisions. Businesses require that their finance departments provide the financial information needed so that key company officials can make informed decisions.

In order to have the information they need, decision makers need real-time data. The key to obtaining this timely information is technology. Frascone stated that in conversations with the customers of Host Analytics, he uncovered various issues that finance departments were having.

He said that people who use excel-based systems have professed problems with reporting, and also encounter broken links. He estimated that 80 percent of plans created in this way have errors that the organization using the program does not know about. As a result, users need to be aware that they could encounter known unknowns and unknown unknowns.

Use of technology

The market expert stated that utilizing specific financial software can be preferable to using more primitive excel-based systems since it can provide the user with better access to data and far greater resources for manipulating that data. In addition, the information gathered can be graphically represented by a dashboard that can quickly provide a user with the data they need on a certain aspect of their company's operations.

The use of technology such as dashboards can also help to boost the visibility and accountability that exist in an organization by gathering and presenting the data that was not known before.

Utilizing robust applications can also provide scenario modeling capability - the ability to model a wide range of potential scenarios - for example acquisitions, offering a new product line, obtaining new channel partners. This offering can help decision makers to obtain solid, detailed data that they can utilize to make informed decisions.

Leveraging Technology in Budgeting and Planning

The market expert stated that he is surprised by the number of clients he speaks with that utilize planning processes based on excel spreadsheets. He said that excel is a powerful desktop application, but it is not a good tool to use in budgeting and planning. Utilizing this program will present users with various challenges, including errors that cannot be located and undermines the quality and reliability of data.

Budgeting and forecasting in a dynamic environment

This segment of the presentation was given by Eric Reid, financial analyst at beverage business Advanced H20. He outlined how his firm worked with Host Analytics and leveraged technology in order to improve their budgeting and forecasting.

The beverage business was reviewing its forecasting process, which currently utilized various excel documents and was cumbersome in nature. The existing system entailed substantial manual entry of data, and the revelation of errors could result in significant time spent trying to find them.

Advanced H20 ended up detailing the various requirements it needed it is new forecasting process, and signed with Host Analytics to develop its new workflow. As a result of utilizing a new solution, the beverage business has benefited from faster time needed for forecasting, the ability to focus more on analyzing data instead of collecting and better and more reliable data.

The stark contrast between the benefits provided by the excel process and the solution provided by Host Analytics illustrates the impact that using the right technology can have. 

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