Financial Planning & Analysis

FP&A software powering your plan to grow Drive smarter, more data-driven business decisions with numbers you can trust. The most critical aspect of any Excel spreadsheet is having the right numbers in the right cells, especially if you’re working in finance. But formatting—which means customizing spreadsheets to look and feel a certain way—is pretty important too. An attractive spreadsheet will draw users in, and good formatting will focus their attention exactly where you want it to go. A skilled finance professional with a keen eye for formatting can produce spreadsheets that are both beautiful and functionally effective. That’s because consistency, efficiency and clarity can be the difference between an adequate Excel model and a great one.  All it takes are some basic formatting guidelines and best practices. Let’s get started with our top 10 spreadsheet formatting tips: 1. How to Use Text Colors Color coding text in Excel gives context to the data. Merely glancing at the spreadsheet can help you understand what kind of data you’re working with. For financial models, follow these guidelines to determine which colors to use: Blue for constants and hard-coded numbers like historical data and assumptions. Black for formulas linked to other cells within the same worksheet. Green for formulas with links to other worksheets within the same file. Red for formulas with external links to another file. To color your text: Select the cell(s) you wish to color. In the Home tab, click on the dropdown button next to the Font Color icon. In the color palette provided, select the color you want. 2. How to Use Bold and Italic Bold text is used for emphasis, and italic text indicates that there’s something distinctive about the data. For instance, on a monthly cash flow spreadsheet, you might want to bold the subtotals and use italics to display percentages, like this: Here’s how to bold and italicize text: Select the cell(s) you want to bold or italicize. Under the Home tab in the Font section, find the icons for Bold and Italic and click the one you want. You could also click both icons and format the text both ways, if you wish. 3. How to Use Conditional Formatting Conditional formatting allows you to format cells automatically when their values meet certain conditions. For example, in the variance column of a budget vs. actuals report, you might want to highlight variances greater than $1,000 with light red fill and dark red text colors. Follow these steps to apply this rule and format values greater than $1,000: First, select the entire column that you want to apply this rule to. In the Home tab, click on the Conditional Formatting icon. Select Highlight Cell Rules and Greater Than. A pop-up box will appear reflecting your previous selections. In the empty box, enter 1000 and use the drop-down menu on the right to select a specific formatting option. Click OK. You can always create additional formatting rules using the other available options. As you get more proficient, you’ll even be able to create custom formatting conditions with your own unique formulas. Learn more about Vena 4. How to Copy Formatting With the Fill Handle The Fill Handle is located on the bottom right corner of a selected cell. When you hover your cursor over the dot, it will turn into a solid black cross. You can use the Fill Handle to copy the formatting from one cell and apply it to other adjacent cells. The method for copying formats across rows is different than copying down columns. Let’s say you’re creating a monthly income statement with the months as your column headers and the various revenue/expense categories as your rows. In the first fillable cell, enter a value and format it with the comma style, no decimals (see tip #7 below). You’ll then want to cascade this format throughout the entire income statement. First, copy the format across the row with these steps: Select the formatted cell. Hover the cursor over the Fill Handle. When you see the solid black cross, drag it across the row to the last cell that needs formatting. The value and format from the first cell will be copied across, but you only want to copy the format. Click on the Auto Fill Options icon next to the last copied cell to display a list of options (pictured below). From this list, select Fill Formatting Only. The numbers will disappear from the copied cells, leaving only the original number. You have now finished formatting the first row. Next, copy the format from the first row to the columns, like this: Highlight the first row with your cursor. Hold the mouse over the Fill Handle and double click. All the cells down to Net Income will fill sequentially with the same format as the first row (pictured below). Click on the Auto Fill Options icon and select Fill Formatting Only. Once again, all the numbers below the first row will disappear, leaving only blank, pre-formatted cells. 5. How to Copy Formatting With the Format Painter The Format Painter makes it easy to copy the formatting from an individual cell and apply it to another part of the spreadsheet. If you’re trying to format cells or groups of cells that aren’t right next to each other, this is the tool you need. Here’s how to use it: Highlight the cell(s) you want to copy the format from. Click on the Format Painter icon located in the Home tab. Hover your cursor over any cell and you’ll see an active paintbrush. Just click or highlight the cells you want to apply the new formatting to.  To lock the Format Painter and apply new formatting to multiple groups of cells, follow these steps: Highlight the area you want to copy the format from. Instead of clicking the Format Painter icon once, double click on it. Then single click or highlight the cells you’re copying to. The paintbrush will remain active and you can continue to copy formatting to other cells or groups of cells. When finished, press the Escape key to get rid of the active paintbrush. 6. How to Format Data as a Table The table feature in Excel is useful for making large volumes of data more readable, sortable and user-friendly. Let’s say, for example, that you were trying to categorize some individual assets by their acquisition date, original value, current market value, etc.   Here’s how you would format that data as a table: Select a cell that’s within the data range you want to turn into a table. In the Home tab, click on the Format as Table icon. Pick a format from the table styles provided in the next pop-up box. If there are no blank cells in your data, Excel will automatically detect the required range for the table. Otherwise, you’ll need to input your data range manually. Make sure you select My Table Has Headers in the pop-up box (pictured above). Click OK, and a table will be created. As you can see, the table is now much easier to read. If you want to sort or filter the data in any of the columns, simply click on the drop-down menu in the column header and make your selection. There are lots of other table features and options you can explore as well. Learn more about Vena 7. How to Format Numbers Numbers on a spreadsheet should be formatted based on what they’re meant to convey. Financial statements, for example, follow certain guidelines when it comes to how the numbers are presented. In these reports, currencies are often punctuated with the comma style, without any decimals. The currency symbol might only need to be shown once on the first row, and again on the Net Income row. To format your numbers like the example above, follow these steps: Select the first cell at the top of the column. Under the Home tab in the Number section, click on the Accounting Number icon, which is represented by the dollar sign (pictured below). Two decimal points will be automatically added to the number, as well as the currency symbol on the left. To remove the decimal points, click on the Decrease Decimals icon twice, once for each decimal (pictured below). Copy this formatting to the Net Income cell with the Format Painter, then bold the cell and add borders if you wish. Now, format the rest of the numbers in the column by selecting all cells between the first and last rows. Under the Home tab in the Number section, click on the Comma Style icon (pictured below). Two decimal places will be automatically added to the numbers. To remove them, click on the Decrease Decimals icon twice, once for each decimal. You can also format large groups of numbers using the Format Cells menu, like this: Highlight a group of cells to be formatted. Under the Home tab in the Cells section, click on Format and then Format Cells. Pick the relevant format from the list in the next pop-up box. To follow the same example as above, select Accounting, and in the Decimal Places field, enter 0 (pictured below). In the Symbol field, use the drop-down menu to select None, or the appropriate currency symbol if required. 8. How to Format Percentages Percentages are often required in spreadsheets that include metrics such as variances, growth assumptions, proportions and more. If you’re analyzing various sources of revenue, for example, you’ll want to use percentages to display the proportion of each revenue source to the total revenue, as shown below: Here’s how to format percentages without any decimals: Highlight the cell(s) you want to format. Under the Home tab in the Number section, click on the Percent Style icon(pictured below). Two decimal places will be automatically added to the numbers. To remove them, click on the Decrease Decimals icon twice. 9. How to Format Dates Including dates in your spreadsheet is crucial for financial statements, cash flows, budgets, and any other financial model. Preferences and best practices determine how dates are formatted. Balance sheets, for example, often have dates formatted the long way, like this: December 31, 2019. Excel provides quick access in the Home tab if you want to format dates using the most common styles. Here’s how to access it: Click the Number Format box in the Home tab, and a drop-down menu will appear. Two date formats are available here, Short Date and Long Date. For more unique date formatting options, click on More Number Formats (pictured above). In the Format Cells box (pictured below), select Date on the left and then find the style that suits your needs. Select the style and click OK. 10. How to Use Balance Check Formatting When building any spreadsheet, Balance Check Formatting is a useful feature that can help you avoid data entry errors. Even if you’re an Excel whiz and a finance expert, you’re still human, and humans make mistakes sometimes! However, it’s easy to actively check for common errors with Balance Check Formatting if you understand how these mistakes happen.  Let’s assume you’re putting together a budget for capital spending. As each department submits their numbers, you’re tracking them on a spreadsheet, carefully itemizing departmental details and subtotals that make up the grand totals for the company. To ensure that the grand totals aren’t missing an item or a department, you can create a Balance Check formula and make it visible by placing the formula right below the grand totals. Here’s how to do it: Below the grand totals, create a formula that sums up the all the individual company spending lines. Make sure it’s a different formula than the one you used to derive the grand totals. So, if you just added the two departmental subtotals to get the grand totals the first time, make sure this new formula includes all the individual spending lines instead. Extend the formula that you’ve just created by referencing and subtracting the grand totals right above. The result should be zero, and imbalances clearly visible. Use conditional formatting to highlight any value that’s not equal to zero. In the example below, you can see that a spending line in year two was missed in your original formula, causing the error. Keep in mind that when you integrate Excel with an external software application, it’s likely that your general ledger entries or other data will be exported into spreadsheets. To avoid errors, build a Balance Check formula to catch incomplete or incorrect data extracts. You’ll be able to formulate your expected totals and compare them to the actuals that are downloaded into Excel, just like the example above. Get the Most Out of Excel Whether you use colors, fonts, professional number styles, conditional formatting or all of those combined, it’s important to follow this guide if you want your financial spreadsheets to be elegant and efficient.  And if you really want to get the most out of Excel for FP&A processes, Vena Solutions adds enterprise-class features including workflow, version control and auditability. Vena can integrate seamlessly with all your existing source systems and pull your financial data right into Excel, making it easy to automate traditionally manual processes like template formatting, budget to actuals variance analysis, and report generation.  So, if you’re looking to streamline FP&A processes at your organization, don’t just “rip and replace” Excel with an unfamiliar tool that your team doesn’t know how to use. Instead, get the best of both worlds with Vena: the flexibility, familiarity and power of Excel, with all the modern features of a cloud solution.

loading="lazy" FP&A software with a native Excel interface Vena brings the most powerful planning capabilities to the most well-known spreadsheet infrastructure so you can hit the ground growing. Excel has dominated the business world unlike any other software since it arrived on the scene in the 1980s. Even today, if you try to take Excel away from finance folks, don’t be surprised if you’re faced with a mutiny. Excel has become so important that you’d be hard-pressed to find a self-respecting finance professional who can work effectively without it. Consider this for a second—when was the last time you went through a budgeting cycle that didn’t involve any spreadsheets? Beyond the finance department, it’s clear that anyone working with numbers in just about any capacity can harness the power of Excel. Huge, complex spreadsheets are now common in the modern workplace across all business functions, which really isn’t surprising considering Excel’s seemingly limitless capabilities. Even as organizations grow, their reliance on Excel isn’t likely to diminish. The familiarity and ease of use that spreadsheets provide is undeniable. While much has been written about Excel and how to use it, there are many tips and tricks that even the most committed spreadsheet gurus might not be aware of. Some of these tips reduce the number of clicks required for common activities, while others increase Excel’s overall power at your fingertips. Here are 10 tips to help you supercharge your Excel experience: 1 Use the Format Painter 2 Select Entire Spreadsheets, Columns or Rows 3 Hide Small Amounts of Data 4 Add More Than One New Row or Column 5 Use Data Validation to Make Drop-Down Menus 6 Transpose Data from a Row to a Column 7 Use Pivot Tables 8 Use Conditional Formatting 9 Turbocharge Excel with Data Integration 10 Remove Duplicate Data 1. Use the Format Painter The Format Painter makes it easy to copy the formatting from one cell and apply it to another cell or group of cells elsewhere on the spreadsheet. Here’s how to do it: Highlight the cell you want to copy the formatting from. Then click on the Format Painter icon, which is located in the Home tab near the upper-left corner. Hover the cursor over the cell you want to format and you’ll see an active paintbrush. Apply the new formatting by clicking the cell. You could also click and drag the cursor if you want to apply the new formatting to multiple adjacent cells all at once. Another helpful trick with the Format Painter is the shortcut for copying formatting to multiple cells at a time, or multiple non-adjacent groups of cells: Highlight the cell you want to copy the formatting from. Instead of clicking the Format Painter icon once, double click on it. Then single click the cell you’re copying to. The paintbrush will remain active so you can continue copying to other cells or groups of cells. When finished, press the Escape key to get rid of the active paintbrush. 2. Select Entire Spreadsheets, Columns or Rows This feature comes in handy when you want to perform actions on whole spreadsheets, columns or rows all at once. Let’s say, for example, that you were trying to wipe out the contents of an entire spreadsheet, or clear the values from a specific row or column. You might find yourself performing this task at the beginning of a budgeting cycle when you’re preparing the spreadsheets to receive fresh data. To select an entire spreadsheet: Click on the top left corner of the spreadsheet where the columns and rows meet, right below the name box. (Blue box in the picture below) To select an entire column: Click on the column header, which is labeled with a letter. (Red box in the picture below) You can select multiple columns by clicking and dragging the cursor over two or more adjacent columns. To select an entire row: Click on the row number. (Purple box in the picture below) You can select multiple rows by clicking and dragging the cursor over two or more adjacent rows. 3. Hide Small Amounts of Data Sometimes it’s necessary to hide spreadsheet data that isn’t relevant to the reader, but still needs to be there to ensure accurate formulas and results, as is often the case with detailed cash flow projections. For aesthetic reasons, or to avoid having the values changed accidentally, you might want to hide the individual lines that lead up to a major revenue item. To hide an entire column: Right click on the column header. The entire column will now be selected and a menu box will pop up. Click Hide. To hide multiple columns: Select multiple columns. Right-click anywhere on the highlighted area. In the menu box, click Hide. To hide an entire row or multiple rows: You can hide entire rows of data by following the same instructions for columns, but clicking on the row numbers instead of the column headers. To hide specific cells: In some cases, you might want to hide the data from one cell or multiple cells in various parts of the spreadsheet. To do this, just select the cells you want to hide, then change the Font Colour (not the Fill Colour) to white. The data will be invisible unless that specific cell is selected. 4. Add More Than One New Row or Column Use this feature to add multiple rows and columns to your spreadsheet quickly, instead of just adding them one at a time. Let’s say you’ve just completed a financial statement, but your boss wants to see new rows of subtotals underneath the fixed expenses. You’ll need to insert some new rows! To add multiple rows: Click and drag the cursor over multiple row numbers, i.e. the number of blank rows you want to add in that spot. Keep your cursor over the highlighted area and right-click. Then, in the ensuing menu box, select Insert. Your data will be shifted down to accommodate the blank rows you’ve just inserted. To add multiple columns: You can add multiple columns using the same instructions as above if you click and drag your cursor along the column headers instead. Data will be shifted to the right to accommodate the blank columns when you insert them. 5. Use Data Validation to Make Drop-Down Menus Data validation using drop-down menus is a useful feature that ensures users are only able to enter values that are predefined from a separate list. Let’s say, for instance, that you’re working on an expense report and you want to include a column that categorizes your line items from a list of specific expense categories (transportation, meals, supplies, entertainment, etc.) You’d need to create a drop-down box so that instead of manually typing the category names into each cell, you can input them quickly, and only choose from your list options. Here’s how: Create the list either in the same spreadsheet where the drop-down menu will be located, or on a separate spreadsheet within the same file. Select the first cell in the column where you want the drop-down formatting to begin. Under the Data tab, look to the right for the Data Tools section and click on the Data Validation icon. (See below) In the ensuing Data Validation box under Validation Criteria, click the Allow box. A drop-down list menu appear. Select List. Another box labeled Source will now be visible. Click on the box. Now, move your cursor to the top of the list of category names you’ve created. Click and drag the cursor down to the end of the list. The source box will now display the cell range where your  list is located. Click OK. A validation drop-down menu will be created in your selected cell. To apply the drop-down formatting to multiple cells, just copy over the formatting using the Format Painter. 6. Transpose Data from a Row to a Column Transposing data between rows and columns is useful for when you want to rearrange your data after it’s been inputted. For example, on a revenue analysis statement, you may have entered product names in a row but later realized that they would be better off in a column. Instead of moving the contents of each cell into a column manually, you can transpose the data like this: Select the row data you want to transpose, then right-click and select Copy. Place your cursor on an empty cell where you want your new column will start, and make sure there are enough blank cells directly below it for your data. Right click on this first cell and select Paste Special. Then click on the Transpose box at the bottom right of the ensuing pop-up menu and hit OK. 7. Use Pivot Tables Excel’s pivot table feature is a data summarization and analysis tool that allows users to extract relevant metrics from large, complex data sets. With pivot tables, you can slice and dice large quantities of data in order to better understand what those numbers are telling you. Let’s say you were looking to analyze some product sales details, for example. Instead of sifting through a large spreadsheet, you could summarize the sales data with a pivot table that only focuses on relevant fields like product ID, units sold, revenue and more.  To start the process, you need to have an open spreadsheet containing the data you want to summarize. Next: Under the Insert tab, click the PivotTable icon. The next menu box is where you’ll select the data you want to summarize. Use your cursor to select either the entire spreadsheet, or a specific range of cells. Select New Worksheet below to build the pivot table on a new sheet and then hit OK. Alternatively, you could select Existing Worksheet to keep the pivot table on the same spreadsheet as your original data. Excel will open a new sheet with a PivotTable area on the left side and PivotTable Fields on the right side. All the column names from your original data will be displayed under the Field Name section in the PivotTable Fields box on the right side of the screen. Under PivotTable Fields, check the boxes of all the specific fields that you want to include in your pivot table. The data will automatically arrange itself in the table on the left. Review the pivot table to make sure the relevant fields are summarized and formatted the way you want. If it doesn’t look right, then go back to the right side and review the four boxes: Filters, Columns, Rows and Values. You can move the fields from one box to another by dragging and dropping. Watch the table on the left of the screen to see how it gets arranged as you experiment with these fields. Once satisfied, save the file. Keep in mind that as you update the data on your original spreadsheet, the pivot table will also update automatically. 8. Use Conditional Formatting Conditional formatting allows you to format cells automatically when their values meet certain conditions. For example, you might want to highlight values greater than 1,000 with a specific color in the variance column of your budget vs. actuals expense comparison. Follow these steps to color values greater than 1,000 a light shade of red: First, select the column you want to apply this rule to. In the Home tab, look to the right for the Styles section and click on the Conditional Formatting icon. Then select Highlight Cell Rules and Greater Than. A pop-up box will appear reflecting your previous selections. In the empty box, enter 1000 and use the drop-down menu on the right to select a specific formatting option. Click OK. You can always create other formatting rules using the available options. As you get more proficient with Excel, you’ll even be able to create custom formatting conditions with your own unique formulas. 9. Turbocharge Excel with Data Integration As companies grow, finance leaders might start thinking that they’ve outgrown Excel due to its scalability concerns, lack of automated workflows, and version control issues. But scrapping Excel completely just isn’t an option for most finance professionals, so why give it up when you can turbocharge Excel with data integration? Modern FP&A software leverages the power and popularity of spreadsheets by linking Excel to existing data source systems and providing one centralized platform for the full spectrum of finance functions. These integration capabilities come with significant advantages, such as: Seamless data transfers between Excel and other applications. Eliminating the need to manually populate spreadsheets and manually re-enter spreadsheet data into other programs. Synchronizing Excel with other programs to transfer data on demand, or at predetermined times. Allowing users to work on native Excel and access live data from the company’s enterprise resource planning system (ERP). Enabling drill-down and/or drill-through capabilities. More robust reporting capabilities. 10. Remove Duplicate Data Sometimes it’s necessary to remove duplicate data from a spreadsheet due to entry errors. This might happen if you’re dealing with multiple versions of the same spreadsheet and accidentally input the same data twice. Instead of finding and deleting the duplicates manually, you can fix this fast with just a few clicks. Here’s how: Select the columns where the duplicates are located. Under the Data tab in the Data Tools section, click on the Remove Duplicates icon. Follow the prompts thereafter. The Power of Excel for Finance With its numerous features, ease of use and immeasurable influence on the way people work, Excel’s place in the finance world is hard to unseat. But most users still haven’t tapped into Excel’s full power. And for the companies that actually have taken the next step and streamlined their spreadsheets with the right tools, reverting back to manual processes would be unthinkable. Keep in mind that these tips are just the tip of the iceberg. To truly make the most out of Excel, learn what data integration can do to turbocharge your budgeting, financial planning and analysis, account reconciliations, and everything in between. FP&A software powering your plan to grow Drive smarter, more data-driven business decisions with numbers you can trust.

In the second of our two-part series examining research from BPM Partners, we look at the four “Cs” that define the trends playing out within finance teams today There are all kinds of companies that want to get the attention of CFOs and FP&A teams, but the real trick is what you encourage them to do once you have it. Consider this familiar scenario: You’re researching finance technology options when you see an online ad that vaguely relates to what you’re investigating – closing the books each month, or preparing next quarter’s forecast, for example. Assuming it’s well-designed and the copy is relevant, you might just click on it. Or just as likely not, assuming for good reason the ad will follow you around in future browsing sessions as part of a retargeting campaign. In other cases, you’ll get a customer e-mail newsletter from a vendor and, while the body might contain useful information, what really matters to the sending company is whether you click through to the “learn more” or “register now” link at the bottom. You may have heard your counterparts in marketing refer to this as a CTA or call to action. Clicking on the CTA will take you to a landing page where, after filling out an online form, you might download a white paper, watch a video or otherwise signal to the vendor that you’re interested in something they have to offer. The concept of a CTA is nothing new to marketers, but nor is it useful only to marketing teams. As a finance professional, the CTA is something you can – and should – use to quickly assess promotional, thought leadership and other offers as you come across them. In the 2019 edition of their annual Vendor Landscape Matrix, for example, research firm BPM Partners published results from a survey of more than 360 FP&A software customers, and an analysis of more than a dozen software vendors. The report highlighted the strength of Vena in several areas, including a personalized onboarding experience, overall customer satisfaction, and functionality ranging from workflow automation to ad hoc analysis and reporting. These factors speak to what BPM refers to as the four “Cs” of business performance management, feature sets identified to help finance professionals evaluate the technology options available to them. The best FP&A solutions feature all four Cs in that they’re: Comprehensive Collaborative Connected Continuous If you look at the BPM report in its entirety (which is well worth the read) you’ll see how appropriate the four Cs are to making the kind of IT investments that will support the success of FP&A teams. And even if you don’t, I’ve summarized the key takeaways in this article, along — along with some CTAs you could consider as you apply this research to your day-to-day professional life. 1. Comprehensive Technologies Benefit from Comprehensive Data Sets When it comes to enterprise-level planning, the buck traditionally stopped with the head of finance. The BPM report shows that’s no longer the case, or at least it might not be for much longer. Less than half, or 44% of those surveyed, said CFOs should be primarily responsible for expanding planning beyond finance departments. Instead, respondents suggested a mixture of other functions and roles, from the CEO or COO (at 21% collectively) to individual department heads at 29%. This makes a lot of sense. Who better to assist with integrating information about marketing into the planning process than the CMO and their team? Or the head of HR for weaving in data about hiring, retention and talent management costs? There’s a disconnect, however, in the way many of those who took part in the survey actually look at operational analysis. When asked what areas they focus on for this purpose, sales data was far and away the biggest winner at 60%, followed by services at 39%. Marketing, HR and even supply chain data trailed in comparison. The CTA: Non-financial data has an increasingly important place in financial planning and analysis (FP&A). Explore how you can deepen the way this kind of data is run through any technologies you choose. 2. If Collaboration Isn’t Easy, Collaboration Doesn’t Happen Everyone has, at some point, found themselves desperately looking back through an e-mail thread to find the right version of a document that was essential to getting something done. We’ve all likely looked down at a printout on which the boss or a colleague had scribbled something we were supposed to act upon. Technology is supposed to improve a lot of things — from the speed at which activities happen to how far they can spread. If it doesn’t improve our ability to work together, however, a lot of that value may never be realized. The BPM report attests to this with the data on collaboration, in which finance pros were asked to rank the kinds of features that tend to boost inter-departmental teamwork. While “sharing documents” captured the lion’s share of votes at 77%, it was followed closely by the ability to insert comments at 65%. The third area, however, may be most intriguing: “workflow process,” cited by 63%. Think about all the different steps involved from taking data and using it to make a decision in your company. Who needs to see what information? Who needs to sign off on a proposed idea? What’s involved in managing the queue of tasks or actions that define how decisions are executed? It can look a lot different depending on the industry or even the particular firm where you work. The CTA: As you assess a technology application’s collaborative capabilities, ask yourself how well you could map out your workflow processes today, and what you’d like the tools to help you change. 3. Connected Data May Be the Only Way to Get the Insights You Need Have you ever stared at a dashboard on your screen and wondered, “What exactly is this report supposed to be showing me?” You’re not alone. BPM offered four different scenarios to those it surveyed around how they might bring together source and transactional data. They included storing summary data in a data warehouse, in an FP&A application or storing more detailed data in the application itself. A majority of 60%, however, said having live, direct access to the source was the ideal. And no wonder. As the report points out, bringing over transactional source data at a more detailed level allows finance teams to use FP&A applications as the primary presentation and analysis tool. The CTA: As you achieve connectivity between source and transactional data, learn how predictive analytics and machine learning technologies could accelerate your ability to help the business achieve its most challenging goals. 4. Continuous Forecasting Requires a Mindset of Continuous Improvement It’s one of the most telling pie charts in the BPM Report: the answers to the question about how frequently organizations reforecast. While most options — such as “as needed,” “varies” and “annually” — attracted less than 10% of those making the selections, a monthly forecast occupied the biggest slice of the pie. The 35% who chose monthly were followed by the 21% who chose “quarterly.” The upshot? Most organizations are reforecasting on a frequent and consistent basis. That’s probably because they want to ensure they are evaluating data collected within a sufficient period, and with the ability to compare with previous forecasts. That said, the future could be very different depending on how technology adoption plays out. The CTA: If you invest in new FP&A applications to improve areas like forecasting, at what point might you weigh the pros and cons of forecasting more frequently? What can you do to prepare for that transition today? The CTAs we’ve suggested here are just the beginning, of course. Whether you’re just starting a journey to take advantage of new technologies or building upon an existing “tech stack,” keep assessing the degree to which you’re achieving comprehensiveness, collaboration, connectivity and a sense of continuity. And if you find the organization is slipping, make the art of taking action your calling card.

  FP&A software powering your plan to grow Drive smarter, more data-driven business decisions with numbers you can trust.   This article was first published in May 2019 and updated on 5 December 2022. As the role of financial planning and analysis (FP&A) continues to evolve, technological proficiency, communication skills and the ability to tell the story behind the numbers will enable industry leaders to address the modern demands they face. FP&A combines the financial close process with budgeting, forecasting, reporting and analytics to predict what investments, resource allocations and other decisions will best achieve a company’s objectives. While the concept has been around for decades, recent advancements in cloud software have enabled FP&A teams to provide company leaders with real-time information and in-depth analysis to align business goals and plans across an organization. Companies need financial planning and analysis no matter what state the economy is in. During times of growth, FP&A is essential for planning business objectives. During leaner or more turbulent times, FP&A helps determine what course corrections and adjustments will keep the company on track and in optimal fiscal health. FP&A is the backbone of the modern finance department. Tasked with consolidating, forecasting, analyzing and reporting on data to support decisions that drive the best business results, FP&A teams make recommendations that have a direct impact on their companies’ success. It’s imperative, therefore, that FP&A professionals incorporate best practices in not just their core tasks, but in uncovering and clearly communicating actionable insights to their companies’ key decision makers. Modern FP&A software is the key to providing these insights. FP&A professionals now have at their disposal sophisticated modelling and analytics that allow them to adapt to changing market conditions faster than ever before. The resulting budgets, forecasts and strategies can be forward-reaching or remain agile as the business and industry landscape change from day to day. What is an FP&A Professional? An FP&A professional uses data, tools and processes such as budgeting, planning, forecasting, analysis and reporting to help businesses make well-informed decisions and achieve a wide range of goals. Traditionally, FP&A analysts, managers and directors reside within the finance department, but recently, FP&A has taken a more visible role organization-wide. Today, key FP&A processes and responsibilities include: Analysis is what enables FP&A professionals to translate raw numbers into insightful KPIs to share with decision makers and form a holistic picture of an organization’s fiscal health. Analysis helps drive informed decisions throughout multiple departments and the business as a whole. Planning is crucial in determining what a company’s fiscal and operational goals will be. During this phase, FP&A teams work closely with executive teams and stakeholders to align departmental plans, creating a unified model of goals and expectations. Budgeting is the process of anticipating, deciding and documenting annual expenses and revenues in the best way to meet operational goals. Developed once a year, taking three to six months to complete, the annual budget is the cornerstone of traditional FP&A. The budget is also the first iteration of the forecasting process. Forecasting is the process of establishing and regularly updating a company’s expected future performance based on past results, as well as current and anticipated future conditions. Scenario forecasts account for expected changes in business conditions, while rolling forecasts involve regular updates extending beyond the fiscal year. Compared to a static budget, forecasting helps companies better prepare for changing conditions and improve their ability to predict the future. Modeling is how FP&A teams use information from multiple sources such as accounting, business operations and finance to model new assumptions, run sensitivity analysis and test alternatives that predict how operational decisions might affect their companies’ financial future. Reporting traditionally refers to financial reporting, which shows past performance, often analyzed further by management and shareholders. Management reporting communicates analysis and insights to decision makers, typically through self-service dashboards that allow users to drill into the details behind summary data. Regulatory reporting combines various data and analyses into reports required by law for public companies, banks and other regulated businesses. Financial close management involves reconciling accounts, reporting period-end results (actuals) and other financial management practices. Traditionally considered the purview of accounting, financial close processes are very much a part of modern or full-spectrum FP&A. Bringing the close process into the fold provides the actuals needed for FP&A purposes including variance analysis, reforecasting, ad hoc management reporting and more. The FP&A Career Path Education for FP&A professionals varies, but traditional degrees supplemented with online certifications are common. Webinars, courses and other resources such as CPE credits teach skills such as building a successful financial model, performing valuation analysis and completing system developments/integrations. Since modern software is providing more automation, modern FP&A professionals spend much of their time extracting insightful recommendations from data. Although it varies by organization, many FP&A teams are organized into junior analysts, senior analysts, and FP&A managers and directors. Junior Analysts  Often arrive in the position by segueing from an accounting career or after completing a bachelor’s degree in a finance- or economics-related field. Junior analysts often help to set up and maintain database systems. Typically, the role requires an understanding of coding or app integrations, skills which are in high demand. The junior analyst often works on a specific product or project and reports directly to a more senior member of the FP&A team. Senior FP&A Analysts  Possess high-level critical thinking skills and a thorough understanding of the company’s overall financial goals. A valuable senior analyst is able to create strategic financial roadmaps based on multiple forecasts and models, providing managers with performance- and data-driven recommendations and analysis that will help inform company-wide strategy. FP&A Managers  Have a technical background in data analysis and corporate finance, but also possess the communication and leadership skills necessary to manage the FP&A team and communicate its findings to company decision makers. FP&A managers perform high-level analysis and provide direction to junior and senior analysts. The FP&A manager also needs to translate complex financial information into actionable insights to be delivered to company management. FP&A director or VP  Is responsible for directing and overseeing all aspects of FP&A. The FP&A director works with the CFO to develop long-term business and financial plans, ensuring company management has the insights they need to make quick, smart, data-driven business decisions. CFO At the top of the FP&A hierarchy is the CFO. In the paradigm of modern FP&A, the chief financial officer is more than just the top bean counter keeping the auditors at bay. The CFO is the chief storyteller, tasked with communicating the organization’s full financial story to the rest of the C-suite. In this role, the CFO brings together the full financial picture, eliminating data islands, breaking down silos and connecting disparate information streams to form one cohesive story. This is what full-spectrum FP&A is all about: not just reporting the numbers (the financial what), but the why and the how. The CFO tells the story of why the numbers are what they are, employs the analysis and modeling to show how the organization can make the best data-driven decisions possible and, most importantly, communicates this information clearly and efficiently.   Learn more about Vena   FP&A Best Practices Single Source of Trusted Data Responsible FP&A begins with trusted data. Since FP&A should be an integral part of major business decisions, it’s imperative that the data is accurate, consistent and easily auditable. Modern FP&A software is a critical tool in addressing this best practice. With customized roles, rules and access permissions integrated into an underlying, centralized and connected database, modern solutions ensure all users have a trusted, single source of the truth. Additionally, today’s leading FP&A solutions offer version control, audit trails and transaction-level drill-down capabilities to provide transparency into FP&A data and the processes that use them. Driving Strategic Business Planning In direct collaboration with department heads and stakeholders, FP&A teams compile a list of prioritized business needs to be budgeted for and determine which long-term goals are company priorities. FP&A teams work closely with company management to create strategic plans by: Analyzing and finding correlations between financial and product, sales, marketing, supply chain and other operational data to uncover the story behind summary financials Determining what resources are best allocated where and when Creating rolling forecasts to continually improve forecasting and planning accuracy Translating forecasts into actionable departmental plans aligned across the business Performing a variety of what-if and scenario analyses to prepare for any change in internal or market conditions Once defined, this plan can easily be shared throughout the company. By using a modern FP&A software solution, managers can easily access high-level data or drill into transaction-level details directly from their dashboard reports. Software that integrates directly with Excel allows finance and business users to pull the numbers and insights they need, using the software they already know and love.   Learn more about Vena   Real-Time Performance Monitoring Continuous monitoring of financial and non-financial performance is an essential FP&A role. Effective financial monitoring can identify variances between forecasted and actual results to determine where existing plans need adjustments in order to remain on target. Monitoring operational performance can help identify problems in production, distribution, marketing and more, in order to make similar course corrections on resource allocation and investment. Best Practice Guidelines for Monitoring Teams  Best practice guidelines for monitoring require teams to: Provide stakeholders with real-time, self-serve dashboard reports Conduct regular variance and profitability analyses Regularly analyze scenario plans and what-if models to be ready for changing conditions on the fly Communicate critical analysis findings to company leadership Assess changes in compliance obligations to confidently meet regulatory reporting and security requirements Make sure to look beyond standard financial statements to monitor business KPIs, including customer acquisition costs (CAC), customer lifetime value (CLV) and customer satisfaction Insightful Analysis An FP&A professional equipped with the right tools will spend 70 to 80 percent of their time analyzing data trends, versus 20 percent in more traditional, siloed finance teams. Teams should perform variance, profitability, scenario and other analyses on a continual basis as changes occur both within the business and externally. Best practices for analysis include: Consolidating data from all relevant sources Understanding the cause of variances between actual and forecasted data Understanding the context of the data set: Is it relevant to a specific date range, region or line of business? Working to establish a hypothesis and reformulating it as it aligns with the data Formulating insights that lead to smart business actions Remaining agile with regard to industry trends and a changing landscape Forecasting on a rolling basis to capture changes, momentum and a variety of scenarios Modern FP&A software solutions help drastically reduce the time it takes to compile and analyze data by offering in-the-moment financial intelligence. Analysts can use scenario planning to model and predict the impact of various scenarios on an organization’s bottom line. Problem: The FP&A team at Coke Consolidated, an organization of over 17,000 people across 76 distribution and manufacturing centers, had an outdated system of multiple disparate spreadsheets. The discrepancies in data caused inaccurate budgets, confusion between departments, and a reduction in finance’s authority within the business. FP&A best practice solution: By implementing a modern FP&A solution that combined Excel with a centralized database, the company was able to unify data across the business, resulting in a more accurate budget and better analysis. Moreover, it increased the team’s value and credibility within the organization.   Learn more about Vena   Organizational Alignment The ultimate best practice is to align planned performance with actual performance. By implementing a software tool that incorporates the full spectrum of FP&A processes—from financial close management, to budgeting and planning, to reporting and analysis—finance teams can align processes, plans and data across the organization. Modern cloud FP&A software empowers teams to manage the following processes and more, with a single, centralized solution: Budgeting Financial close management Tax provisioning Consolidations Account reconciliation Allocations Regulatory reporting Dashboards Variance analyses Planning Forecasting Financial reporting Scenario modeling Modern FP&A cloud solutions store financial data in a centralized cloud database, creating a secure, single version of the truth. Cloud architecture offers on-demand scalability for any number of accounts, entities and transactions, allowing finance and business teams to access and share information instantaneously, and bringing teams into alignment across an organization.   Want 75% more time in your day? Vena automates time-consuming financial close processes, e.g., data collection, account reconciliation and inter-company transactions.   FP&A: Tools for Success Modern cloud solutions give FP&A teams more time to analyze and monitor data, to ensure their reports and recommendations inform smarter, faster business decisions. Workflow automation goes a step further, making core finance processes as efficient, accurate and insightful as possible. And by analyzing and reporting on the resulting financial and operational metrics, FP&A teams are ensuring that all departmental and business-wide plans are lined up and based on the same, trusted data. Of course, FP&A will evolve, and continue to take on a larger role within organizations. Although the roles will continue to sit under the umbrella of finance for the foreseeable future, the insight and analysis from FP&A will inform a growing number of planning decisions across departments and organizations. By adhering to these best practices and building out talented FP&A teams, businesses can be sure to make confident and informed decisions that help exceed organizational goals. Teams that operate with transparency and effective communication, that follow best practices like those described above, will be in the best possible position for success—even through periods of constant change   Ready to start your own growth journey?  

Digital products and services have changed our personal lives, and now they’re changing expectations of what we use at work, too Stories of technology entering the office rarely read like a fairy tale, and yet for some reason, it’s often assumed there’s going to be a “happily ever after” once a purchase is made. Go to almost any conference aimed at B2B marketers lately, for example, and you’ll hear keynote speakers and panelists often making a similar point: that the way we’ve gotten used to shopping online, streaming TV shows or movies, playing on our smartphone and having automatic recommendations for things we like has changed corporate buying forever. While B2B marketing might once have treated CEOs, CIOs or even CFOs as though they checked her personal lives at the door when they come to work, there’s a growing recognition that their expectations have changed. This is nothing really new, of course. In fact, consulting firm Deloitte was talking about this trend five years ago: “Due to the complexity of B2B transactions, the need for integration of human and digital channels is more pronounced. Moreover, spoilt with the convenience of self-service in the consumer space, B2B buyers are now on the hunt for a superior sales and self-service experience” Deloitte More recently, Forrester Research declared ‘The Birth Of The B2B Consumer’ in a report that covered similar territory. “In an increasingly subscription-centered economy, B2B consumers have more choices than ever, and they want to know that their purchase decision is paying off long after the ink dries on the contract — raising expectations for even more personalized engagement after the sale,” the authors wrote. “B2B marketers need to embrace proven B2C loyalty marketing practices to prevent customer erosion.” “B2B marketers need to embrace proven B2C loyalty marketing practices to prevent customer erosion.” Forrester While this is all undoubtedly true, this may be a mind shift with a missing link. It’s not just B2B buying processes that need to adapt to the human-centered, more simplified approaches of consumer brands. The way B2B products are used must become easier too. B2B consumers (B2BC), in other words, shouldn’t merely be thought of as a set of people making transactions, but consumers looking for the best possible user experience (UX) when they put the product into action.  How to Optimize UX Design for the B2BC Market Of course, if some in the tech vendor community are still figuring out what a good B2BC  UX design looks and feels like, it can only be more challenging for CFOs or FP&A teams who are trying to find the right tools for their highly specific needs. Last Fall, CIO Magazine published a look at some possible best practices in B2B UX. Though the advice was aimed at those developing web sites or products for other B2B companies, you could still apply it to a particular line of business – like finance. “Most B2B brands have the advantage of long-term relationships with their customers. Those relationships can form the basis for UX research – an iterative process that continuously optimizes users’ digital interactions,” the article said. “Beta testing, focus groups and other research methods play an important role in B2B UX design. But methodology aside, you need to spend time listening to your customers to determine how to improve the user experience for each type of user that visits your commerce site.” For CFOs or those leading FP&A teams, the “customers” in your case are your staff and colleagues. You may not be well versed in enterprise software design, but you can still tap into your inner expertise about how your coworkers do their jobs today, and the kind of UX that will make changing processes or adapting to new tools more fluid. A “focus group,” in this case, could simply be your next team meeting, where you talk candidly about what you’re trying to accomplish by making a software purchase, and then solicit feedback about how to provide a tool they’ll love. The ‘Heart’ Of B2BC SaaS If “love” seems like too strong of a word, don’t worry. Adopting a B2BC mindset just means taking into account the emotional aspects of using a particular piece of technology. A publication called UX Collective nailed it with an article on excellence in enterprise SaaS design: “An enterprise user, other than wanting to get his work done efficiently, often has other agendas like career growth, learning, and success within the organization. Designing for working professionals requires a good understanding of their job context, workflow, environment, aspirations, problems and also looking into their current solutions” UX Collective Hopefully if you work in finance, you have that understanding already. It’s a matter of translating it into the requirements you bring to the vendors you’re considering. Also bear in mind that a good SaaS vendor will have the benefit of working with multiple customers within a particular geography, industry or role. Glean what they’ve learned  from similar business consumer experiences as you make your final decisions. Finally, the right vendor will also be prepared to have an ongoing dialogue about how  B2BC UX should evolve, including ways it might need to be customized to your particular “consumers.” There may always be differences in the software used by consumers versus those in a business — price, security and functionality come to mind — but complexity shouldn’t be one of them. Over time, we may come to see that as the very antithesis of what B2BC is meant to be.

This blog was first published in 2019 and updated on December 8, 2021. FP&A Software Powering Your Plan To Grow Drive smarter, more data-driven business decisions with numbers you can trust. The importance of financial planning and analysis cannot be understated. Without the right planning, analysis and finance leadership, no company can reach its full potential. Financial planning and analysis (FP&A) is incredibly important. Without careful planning, analysis, and the right finance leadership, a company can’t realize its full growth potential. It’s that simple. Despite its crucial role in operations, FP&A has often been siloed, having little communication with other departments. This post covers a 2020 study that found data silos were a challenge for 57% of finance teams. In the past, data collection and reporting were time-consuming manual processes, and strategic insights were limited in scope and executive influence (e.g. standard financial statements). But thanks to advancements in cloud technology, automation, and modern analytics, FP&A has now emerged as an essential bridge between finance and operations. Modern FP&A helps to drive informed financial and business decisions. Today, FP&A professionals have a front seat in revamping lines of business, driving budgets, and forecasting clear paths to achieve operational goals. Well-run FP&A team functions by connecting the dots of multiple departments to help guide the strategic decisions of its business leaders. Modern financial planning and analysis is a wide-ranging set of processes, data, tools and people. As such, this guide will focus on the basics: what FP&A is, why it’s important, and what FP&A teams do. Additionally, and importantly, we will also discuss how FP&A software works. 1 What Is Financial Planning and Analysis? 2 Why Do Businesses Need FP&A? 3 What Do FP&A Teams Do? 4 What Skills Do FP&A Professionals Need? 5 What Is Modern FP&A Software? 6 Excel: Integration vs. Imitation 7 The Future of FP&A What Is Financial Planning and Analysis? Terminology Financial Planning and Analysis Financial planning and analysis (FP&A) today is not just about streamlining and unifying how finance teams monitor and manage their companies’ past or present performance; it encompasses how they plan for the best future performance using insights and analysis from both financial and operational data. The full spectrum of modern FP&A ranges from standard processes like account reconciliations, month-end reporting, budgeting and forecasting, to scenario modeling, sensitivity analysis and other analytics that inform smarter, more agile strategic decisions and help businesses perform to their full potential. Just as importantly, FP&A brings cross-departmental leaders, data, objectives and budgets into alignment around a single set of corporate goals. FP&A takes advantage of powerful analytics and financial modeling to inform the business planning process. Done right, it considers historical and forecasted financials and operational data, changing market conditions and company-wide performance to help determine the best opportunities for future growth and profitability. FP&A Steps FP&A is best described as a continuous cycle of data collection and analysis, management reporting, forecasting and planning and—finally—execution and financial close management. Each step informs the next: First, collecting financial and non-financial data, both planned and actuals Then, analyzing those data to uncover insights behind high-level numbers Next, communicating key insights to management through effective reporting Then, forecasting and adjusting plans based on reported KPIs and insights And finally, modeling new assumptions and executing on revised plans As those plans unfold and the books are closed at the end of a fiscal period, the cycle begins again. The FP&A function can analyze an organization as a whole, examine individual departments and capture day-to-day operational data in real-time. FP&A uncovers financial and operational insights to create more accurate forecasts and to aid executives in making well-informed business decisions to meet short- and long-term goals. Why Do Businesses Need Financial Planning and Analysis? FP&A is breaking out of its traditional finance silo and taking on a more visible role across organizations. Now, it’s time for FP&A teams to take advantage of this opportunity and establish themselves as vital partners to support the entire business. By owning and analyzing data and being able to translate company-wide insights into actionable plans, FP&A helps businesses meet objectives including: Increase the confidence finance and management have in their budgets and forecasts and the decisions and plans based on them. Provide management with the reports, insights and KPIs they need to make quick, smart decisions—for planning purposes or in response to changing external factors. Align and clearly define business goals and strategies. Streamline operations and maximize profitability and growth by identifying where resources are needed most. Determine the impact of different resource allocations on short- and long-term objectives. Identify roadblocks and risks to existing plans. Continuously improve forecasting accuracy. Perform scenario or what-if modeling to be prepared for any change in company or market conditions Properly implemented FP&A can mean the difference between profit and loss. That’s why corporations are increasingly reliant on FP&A to provide the roadmap for achieving broad operational goals. These financial roadmaps need to be well communicated, agile and monitored continuously to keep up with ever-changing market conditions and competitive challenges and take advantage of new opportunities as they arise. Check out how iPSL finished budgets and forecast reports 66% faster, from 6 weeks to 10 days. What Do FP&A Teams Do? FP&A teams play an integral part in informing corporate strategy, providing insights into planning, budgeting and forecasting, and tying them to achieving overall company goals. Today, financial planning and analysis professionals work side by side with business decision-makers. They weigh in on business planning and analyze the full implications of changing corporate plans, market conditions, and other drivers. You can frame the role by thinking about it in relation to another important finance team member: the accountant. An accountant typically processes and reports on actual financial transactions. On the other hand, FP&A professionals compare these numbers against budgets and forecasts to identify telling variances, using that information to guide business leaders on what to do moving forward. In other words, FP&A teams are financial storytellers with direct influence on corporate strategy. The FP&A professional fits into an organization by helping connect the dots across departments. Lining up goals between financial and operational leadership can help identify ways to improve the bottom line. As a result, the FP&A role no longer resides exclusively in the finance department. But instead, it falls somewhere between the CFO and COO, helping to drive more strategic decisions. What Skills Do Financial Planning and Analysis Professionals Need? In the past, FP&A relied on building financial and analyzing monthly or quarterly financial results, primarily in Excel. But as the role of FP&A continues to evolve, technological proficiency, communication skills and the ability to tell a story through data, analytics and BI will equip FP&A professionals to address the modern demands they face. The key skills and capabilities today’s FP&A teams need—beyond the annual budget or month-end close—to do modern FP&A effectively are broader and more business-focused than they were only a decade ago. For each skill set of today’s FP&A teams, the corresponding FP&A applications are as follows: Communication, Presentation and Storytelling Deliver financial reports of various units and departments Translate mountains of company-wide data into understandable KPIs for company management Provide decision-making insights to C-level executives through self-service reporting Business Planning Partner across departments to align budgets with goals Transform financial and non-financial data into goal-focused narratives Budgeting and Forecasting Analyze variances between forecasted and actual financials and the reasons behind them (Read more about variance analysis in this post) Apply analyses to regular forecasts and continuously improve forecasting accuracy Monitor and account for pivots in the industry, economy and internal operations Better budgeting and forecasting with Vena Discover how Vena’s budgeting and forecasting software can take your planning cycle to the next level. Analysis Uncover correlations and trends in key performance indicators Run scenario and what-if analyses to be prepared for changes in market and internal conditions Identify your most profitable products regions, customers and more Reporting and Analytics Create reports tailored for all stakeholders through leading software Apply technologies (including BI) and statistical analysis to uncover hidden insights behind standard financial numbers Integrate financials with departmental data sources for holistic performance analysis The career path for an FP&A professional continues to evolve. Advances in process automation have cut down on the hours typically spent collecting, consolidating and verifying numbers. As a result, this frees up valuable time to analyze data, investigate discrepancies, and transform insight into confident action. What Is Modern Financial Planning and Analysis Software? Modern FP&A software provides real-time reporting and personalized, self-service dashboards with accurate numbers and intuitive drill-down capabilities. Templates, forecasts, budgets and reports can be easily shared throughout an organization without worrying about data integrity. A central, connected database and built-in version control ensure that everyone is looking at the right data. Cloud technology enables modern FP&A software to connect a company’s existing templates and models to a central database. At the same time, process automation liberates FP&A teams from tedious, manual processes like collecting and verifying company-wide data. For years, FP&A teams relied on Excel to report, forecast and budget. It makes sense: Excel is intuitive, flexible and found everywhere in business. However, for all of its advantages, Excel has some serious limitations in scalability, collaboration, and control, among others. It can be challenging to share Excel worksheets efficiently while maintaining control of document versions and process workflow. Excel’s renowned flexibility can also be its greatest weakness, with minor changes potentially throwing off entire budgets, forecasts, models and reports. Case in point: at companies with typical financial planning and analysis or corporate performance management (CPM) software, 84% of the time, end-users end up hitting “Export to Excel.” Why? Because they’re so familiar with the ins and outs of their favorite spreadsheet software. FP&A Challenges With Excel While this approach might work great for short-term tasks, it creates a “shadow system” of disconnected spreadsheets with challenges around version control, audit trails, data integrity and other issues—ultimately the same challenges that the FP&A software was implemented to solve in the first place. An offline, disconnected Excel spreadsheet system can show budget owners and management obsolete, inaccurate and competing versions of what should be consistent numbers. Other challenges with Excel include: 1. Manual Data Collection and Consolidation  Companies often export-controlled data from FP&A and other source systems, manually copying and pasting that data into Excel to take advantage of its familiar, intuitive interface. Even if the data was copied and pasted perfectly (which is rarer than it might seem), it’s still a highly inefficient transfer method. 2. Lack of Auditability or Version Control:  Excel lacks a robust built-in mechanism to track changes by cell or user, and it doesn’t offer the ability to revert to a previous version if errors are encountered. The result: questionable data accuracy and integrity. 3. Lack of Process Management Excel cannot track tasks across projects, users and organizations, or the ability to set user-level permissions and access levels. This means it’s nearly impossible to keep track of who’s doing what at any given time. 4. Scalability Excel is a powerful, intuitive and feature-rich program, but one thing it’s not is a database. Trying to combine, analyze or report on large volumes of data in a standalone spreadsheet simply isn’t practical. Excel: Integration vs. Imitation Some modern FP&A software vendors try to solve the limitations of Excel through imitation. But unfortunately, it’s quite the opposite. Many go to great lengths to try and recreate the familiar feel, flexibility and performance of Excel, but they never duplicate the full Excel experience. They almost always require extensive training and a steep learning curve—especially for business users. Features like data integration and version control eliminate many of Excel’s limitations, but the vast majority of users still have a hard time moving past Excel. Most finance professionals have used it their entire careers and will often go out of their way to use what they’re most comfortable with: real, full-featured, flexible Excel. See how a familiar Excel interface led to easier and faster user adoption at Partners in Health. The ideal solution is to combine the best of both worlds by using Excel as a window into a centralized, connected database. This approach enables teams to continue using Excel while adding: a single source of truth, made possible by a centralized database workflow management and automation detailed audit trails user-level permissions and data access levels automated data integration and consolidation full-spectrum FP&A capabilities—from budgeting to account reconciliation to scenario modeling and management reporting (This post covers how to mitigate risk with agile scenario modeling) intuitive, self-serve reporting for every stakeholder group a scalable, secure cloud architecture Using Excel as an end-user interface allows you to connect your existing spreadsheets, templates and models to a central database governed by a sophisticated workflow engine and business rules. As a result, you continue to benefit from Excel’s flexibility and unmatched computing power while doubling down on data integrity, usability, and security. Modern Financial Planning and Analysis Solutions With a modern FP&A cloud solution that includes an Excel user interface and data integration capabilities, teams can drastically cut down on time it takes to close the books, create forecasts and populate reports. Powerful analytics can lead to faster decision-making, accurate predictions, and better financial modeling. As such, with modern FP&A software, an impressive number of processes can be automated, including: Budgeting, planning, and forecasting Management reporting and analysis Financial close management Workforce and other operational planning Regulatory reporting The Future of FP&A With platform solutions that can accurately consolidate data and cut down on time it takes to compile reports, the role of the FP&A professional is shifting as a result. With that shift, communication, storytelling, and high-level data analysis skills will continue to be in high demand. As FP&A evolves, it will continue to take on a larger role within organizations—FP&A will continue to live in finance. But the insight it provides and the stories it tells will inform decisions at the highest levels of the business. Advancements in the software will continue to shape FP&A now and in the future. As artificial intelligence and predictive analytics begin to drive innovation in earnest, the ability for FP&A to lead organizational change will only continue to grow. As processes and tools evolve, FP&A will play an even more active role across departments as a result. Cliche as it might seem, the future of financial planning and analysis is now. Modern solutions seamlessly integrate with Excel, Power BI, Microsoft Office (and Office 365) and Google Suite, with automation to streamline critical FP&A processes so financial professionals can create and share accurate reports across teams with ease.  Modern FP&A solutions provide a single source of truth: a centralized database that provides trusted and timely budgets, forecasts and reports to educate and inform decision making with insightful analysis across an organization.   Did you learn a lot about financial planning and analysis in this post? Here are three more posts to read next: Excel for Finance: Spreadsheet Skills for FP&A and Beyond FP&A Professionals Only Spend 25% of Their Time on Analysis Financial Planning and Analysis: Roles and Best Practices June 14-18, 2021 Join Us For Vena Nation Week! Learn more about finance-led planning and streamlining key processes by joining The FP&A Professionals Panel on June 15th from 11:30 - 12:30 pm EDT.

Smart, predictable and rapid revenue growth is great news for any business, but for SaaS firms it's a matter of survival. Last Spring, a popular startup publication called Hackernoon presented a video interview with Kees de Jong, a seasoned angel investor who has learned a lot about what makes software-as-a-service companies (SaaS) grow — or fail to grow, for that matter. As a serial entrepreneur himself, de Jong said it was only looking back in hindsight that he realized the often competing goals of growth versus profitability have some very logical solutions. It’s just that emotions can get in the way sometimes. “The people crying, the systems going down, almost going bankrupt…” he recalled. “We were growing out of cash, because when you grow you never have money and you can grow to death.” In other words, leading a SaaS startup is a lot like running any small business, in that you’re faced with a series of choices. It’s the nature of those choices where the difference may lie. As De Jong puts it in the piece: Extending the lease of your office and making sure that your key core customer is happy aren’t the same thing — they don’t deserve the same attention. Both problems may be urgent, however one defines your future while the other is a little hurdle on the way to growth. Of course, those are just two examples of what may be on a SaaS founder’s radar at any given moment. There’s also the question of whether some customers’ happiness is more urgent than others, and how you best measure it in the first place. This assumes you even have a wealth of customers to weed through. Especially in the early days, SaaS firms are often fighting an uphill battle to be recognized against established or fast-moving competitors with much larger marketing budgets. Once you actually land some customers, what’s the best way to monetize them — through a subscription to the cloud-based service itself, training and integration services, or a combination of those things and others? The only way to make any of this easier is to put a plan in place as early as possible; one that combines the right talent, technology and tactics to ensure predictable revenue is not among the many unknowns a SaaS firm needs to think through on a daily basis. This post is about what it takes to reach that position, how to stay there, and the unique challenges SaaS companies face along the way. 1. Success is measured by a different yardstick It was ugly for Jeremy Thomas and his team, even though they’d done what any good startup would do. Back when his firm — a cloud-based book publisher called Inkshares — was just getting off the ground, the company turned to a venture capital executive for some advice. In a post on Medium that has been cited many times since, Thomas was incredibly candid about what happened next: “The advice we got was that revenue is unimportant. User growth and retention is what matters. If we focused on revenue growth, we wouldn’t spend aggressively, and we’d fail to “own the market,’” he wrote. “We accepted and implemented this growth-over-revenue approach for about 9 months in 2015 after closing our Seed round. It almost killed us as we entered this tough fundraising environment.” Thomas calls this thinking a “disease” in Silicon Valley. It may make sense if attracting VC money is your primary goal, but not if you’re trying to create a viable business with a long-term future ahead of it. Not all VCs think this way, of course. In fact, Right Click Capital’s Garry Visiontay recently posted a column on StartupDaily that warned against the allure of “traction” — the idea that growth in and of itself is a virtue. “You probably believe that if you can show potential investors active users, registered users, website traffic, and demonstrate momentum in the market adoption of your product, then you’re ahead of the game and on the path to success,” he said. “We zone in on business revenue, in particular the month-on-month (MOM) revenue over previous months or years. If these figures don’t form part of the pitch deck, it is usually an indication that either the business is still pre-revenue or the founders are trying to hide their traction results.” Besides MOM, startups building a business on the cloud could be tracking a lot more in their dashboard — including things that may go well beyond the EBITDA or EPS that’s common in traditional financial statements. For a mobile app maker, the lifetime value (LTV) of the average customer might be key. More enterprise-oriented firms might focus on annual contract value (ACV) or customer acquisition cost (CAC). Losing customers on a regular basis might mean churn is a critical metric for still others. Getting ahead of all this has already lead to the transformation of the CFO role in many large organizations. Even in startups, where founders might initially take on the CFO role themselves, it means managing both financial and non-financial data in a more sophisticated way. It doesn’t mean you have to throw away spreadsheets, but it will mean adding the right tools to augment them. But first, let’s get a better handle on what kind of revenue we’re really talking about. 2. A dollar's value depends on where it comes from…and where it goes He calls his blog “Both Sides of the Table” because he’s been both an entrepreneur looking for money and a VC deciding whether or not to dole it out. Brad Feld is one of the leading authorities in the startup space, and last summer he asked a question in his headline that might have sounded odd, at first: ‘Should startups care about profitability?’ Despite a culture that tends to celebrate failure and nurtures an optimism that success may be just a few quarters away, Feld says he’s adopted a far more pragmatic stance as an investor. “When I look at an income statement I start by focusing on the revenue line. I want to understand how many units the company is selling, whether this is increasing over time and how well they’re doing at retaining the customers that they do acquire,” he wrote, adding that there’s a difference between revenue and what he calls quality revenue. “Is it one product line or multiple? Do 20% of the customers make 80% of the revenue or do the top 3 customers represent 80% of the revenue? Is the revenue dependent on a concentrated set of distribution partners or platforms that put future revenue at risk?”   If VCs are asking these questions, entrepreneurs should be doing the same, but even earlier in the process of launching and bringing their company to market. Getting the answers may not be as easy as it sounds, however. Even though startups are often praised for being more agile and dynamic than large corporations of the past, it’s still possible for critical information about data related to quality revenue to remain hidden in silos across marketing, sales or other functions. The other risk among high growth SaaS companies is trying to market and capture the best customers by throwing everything at the wall and seeing what sticks. A lot of successful entrepreneurs have come up with great product ideas through a commitment to experimentation, for example, but that doesn’t mean the same approach works well in running a business. Take it from Greg Poirier, an entrepreneur with a CRM integration firm called CloudKettle, who was pretty blunt in a blog post about ensuring every marketing dollar achieves the maximum impact: “Most growth hacking tactics measure outputs instead of outcomes. Say you run a campaign to gain free trial signups for your SaaS product. What are you going to do with 100 new free trial signups? How many of those 100 trials become paying customers? How do those free signups drive revenue? Marketing goals should always align with revenue goals. Growth hacks rarely consider outputs in terms of generating revenue for your company in the long term.” So what would an ideal picture of a revenue-oriented SaaS startup look like? We’re getting closer. 3. Alignment is always a challenge but even more so at high speed No matter how they imagine their future as a larger organization, most growing SaaS companies probably want to avoid the situation — a fact of life in so many corporations — where inter-departmental friction has become so bad that nothing ever seems to get done. This is by no means an inevitability, of course. In fact, there’s a great article on SaaScribe that gives some practical tips on how sales and marketing departments in particular could work more collaboratively. Some of the ideas there include “closed loop” reporting, where every dollar can be tracked back and attributed to something the team did, or reporting on the percentages of revenue that have come from inbound versus outbound sources. Don’t stop there, though. Consider the inputs and impact on revenue that will come through the work of the customer service side of the business, the IT department and so on. This, incidentally, was the thinking behind the recent launch of Vena’s Revenue Performance Management (RPM) solution. We’ve been talking for several years now about CFOs forming more strategic alliances with CMOs, CIOs and sales execs. It only made sense to create something that could ease the otherwise-onerous task of pulling data from marketing automation software or tools like Google Analytics, then cross-referencing it with insights from Salesforce.com and other CRM systems, or customer satisfaction metrics like Net Promoter Scores. When you can weave those disparate data sources together — along with others like support software and so on — you start to get a real sense of how different departments’ metrics can influence each other. Once that starts to happen, working more collaboratively on common goals — like growing AAR, reducing churn and CAC or maximizing LTV — becomes a lot easier. Different lines of business will still have specific things they need to track – ideally with tools like our RPM software to summarize specific KPIs with personalized dashboards — but when it comes time to look at shared resources and how they should be allocated, everyone needs to be on the same page. Final Thoughts When you have a holistic view of all revenue generating (or influencing) departments, you’ll be in a good place to heed Glenn Wisegarver’s advice. The CFO at marketing SaaS firm Moz, Wisegarver wrote on Forbes about startups that fail to recognize the potential fragility in their business performance: “Given the addictive nature of deferred revenue, it is critical that management appreciates its potential volatility. Management should continually revise its forward-looking forecast and model what-if scenarios to understand the range of outcomes,” he wrote. “Ideally, companies should include forward-looking variables whenever possible (i.e. deal funnel volumes by stage, bookings, etc.). From there, the what-if scenarios should be supplemented with clear action plans and trigger points. Finally, management needs to have the fortitude and courage to implement difficult measures when warranted.” This comes down to constantly monitoring, reviewing and understanding your objectives and what shapes them. It’s coupling the right RPM software with a focus on the right priorities, and bringing together people who can imagine what your company might look like in five years, not just what it looks like today. To some extent, there has never been a better time to build a business on cloud computing. The technology has evolved to a point where it can be trusted and managed effectively to offer all manner of services and applications. The devices to access cloud-based resources keep getting smaller, faster and overall better than the generation that came before them. Yet it remains one of the few areas in which innovative founders can take a good idea and launch something that disrupts the most entrenched incumbents in a particular market — or create entirely new markets. Being successful in SaaS, however — not just launching a startup but building an enduring company — means managing a solid business. For that, you need revenue you can count on. And you can only count on revenue when you have the right data, people and tools to know where you’re at, and where you’re headed. 

Revenue, Always on My Mind The song ‘Always on My Mind,’ first recorded by Elvis in 1972, was again recorded by Willie Nelson in 1982 and once more by Michael Buble in 2007. No matter whose vocal stylings are belting out the lyrics, this song always catches my ear, and gives me a nudge in the ribs. I’ve been in airports, taxis and elevators, letting the lyrics remind me of one thing that’s always on my mind – revenue. Will we make our quarterly targets? Should we start to fundraise again? How will an increase in digital marketing spend move the revenue needle? Can we take our ambitious goals and break them into manageable pieces? Should we go after every customer, or just the most profitable? Before you judge, yes, of course, my family is always on my mind, but I know I can rely on their happiness and support as long as I keep being a good father and husband. As a CEO though, I don’t always have that luxury with my business. And I know I’m not alone. I have colleagues at this very moment losing sleep over upcoming board meetings and quarterly reports. On their minds are questions like: How accurate are our cost per acquisition, churn rates, and recurring revenue forecasts? If our investors want more revenue growth or earnings per share, how can we best deliver? Three Words to Calm Revenue Frets The answer to what’s on our collective minds – and those of any leader of an insight-driven organization – may well be summed up by three simple words: revenue performance management, or RPM. RPM is a combination of purpose-built technology and collaborative processes that help businesses better predict often complex revenue streams. It starts with more accurate prediction, then enables businesses to optimize revenues by focusing on the most profitable customers, products and channels. And it requires tools that combine financial and non-financial metrics, people and data sources from across the organization. In the vast majority of businesses, RPM is the untold story behind the top line. It’s is why some companies are thriving, and not surviving: At crunch times in the planning process, they’re ready with scenario modeling They facilitate accountability and collaboration across all revenue generating business units No matter how volatile the market or fierce the competition, they make real-time data-driven decisions When you start to hold others within your organization accountable for revenue generation, the stress CEOs and CFOs carry around revenues starts to melt. When first introduced to the concept the skeptic in me asked, if RPM is such a game changer, why don't we see more of it? The answer is easy, and why we see slow adoption with most new business processes. It requires a shift in: Thinking from ‘where to cut’ to ‘where to spend’ The finance role, from collecting information to sharing insights Sales and marketing from ‘spray and pray’ to targeting the right customer at the right time From Cutting Costs to Investing Resources When profits become an issue (they always do at some time or another), the stereotypical message sent down by finance is a harsh NO to any expansion or spending. Spending cuts are familiar, habitual and easy to justify. Traditionally, spending cuts start with the marketing budget. “Prospects know about our brand; the world won’t forget about us if we don’t participate in an industry event or two.”  “The website upgrade has been put off for three years, let’s pinch pennies for at least another.” Pressure on sales leaders to trim the fat causes intense staffing scrutiny. “Sales teams don’t require support staff, do they?” “Closing a branch to focus on another region will remove red ink off the books.” As for customer care, somehow we forget it’s seven times as expensive to acquire a new client as it is to extend the subscription of an existing member. “The loyalty program is fluff, kill it.” “Onboarding doesn’t require in-person visits, let’s save on travel.” It’s easy to cut or pause spending – that’s why we do it. What makes it easy? The decision to cut budgets requires considerably less or no data analysis. We can make a safe assumption if there is such a thing. Assumptions – the Not so Silent Revenue Killer Speaking of assumptions, this is a good time to ask yourself if assumptions helped lead to your current challenges with revenue predictability and optimization. To illustrate, see if any of these sound familiar: “At my last employer, we hit our sales targets by hiring more reps and sending them out to knock on doors.” “Most businesses in our industry are moving to a self-serve customer onboarding and support system.” “Decreasing customer service tickets has nothing to do with the kind of customer we attract and onboard; it’s simply a cost of doing business.” Maybe this line of thinking is working for your business. For me (and my team), when we’re concerned with how to grow revenues, where we should invest sales, marketing, and customer care resources, I demand data-driven decisions. Revenue Targets: A Team Sport In my experience, decisions made in silos rarely pay off. The best decision-making involves multiple departments, and insights from financial and non-financial data. Let’s take a look at what I call silo success: Marketing has a positive return on investing in an industry event. Marketing increases lead generation for the month, and sales close on them. Cost per lead lowers, and sales make their targets – success, or is it? A month later, more than half the customers sourced from that event turn into high-maintenance drains on resources. Customer acquisition and retention costs skyrockets for the quarter.   What’s worse, this exact same scenario happened last year. The size of client, combined with the industry isn’t a fit for the product. It requires excessive configuration and ongoing support. I recently shared with my team an article in Inc. Magazine, 4 Ways Successful Leaders Tackle Difficult Decisions. It drives home the importance of decision-making as a team. As people, we have the need to be valued, and the most valued people in any successful business share the data they’re collecting. When the rubber hits the road, however, this can be easier said than done. Marketing relies on data from Google Analytics and marketing automation systems to determine success. Sales and customer success teams are leveraging Salesforce.com and customer survey data, while finance is knee deep in ERP and GL systems. These silos may work for reporting on what’s already happened, but tear them down and you’ve got a holistic view of the future. You’ve got revenue performance management and your team transforms into a data-driven machine. Contrasting with silo and assumption-driven businesses, one that’s adopted RPM looks something like this: Marketing knows an increase of X amount in X tactic will generate X leads. Sales determines that the best leads come from X territory and take X amount of time to close. Customer success knows required resources for onboarding and ongoing training. With finance in the lead, each department receives the funding they need, plans execution starts and predictable revenue is generated – without habitual budget cuts. The result: a team not thrown into panic pouring money into anything they think will work to bring in new customers – a team that finds the most profitable customers, in the least amount of time, with the least amount of resources. The Right Kind of Revenue Beyond accurate predictions, RPM recognizes that not all revenue is created equal. It’s a strategic approach to predictable and smart revenue that’s optimized and dependable. Customers with a healthy lifetime value. Shifting from ‘any customer, from anywhere, at any cost’ to customers you can easily attract, satisfy and retain. Sitting in a boardroom, surrounded by department heads who see life from each other’s perspective, who plan and forecast together, who have the answers before I pose a question. That’s collaboration. That’s data turned into insights. That’s knowledge turned into action. As for the song currently looping in my head after discussing revenue performance management, it sure isn’t Puff Daddy’s Mo Money Mo Problems. In fact, I might pull out the guitar tonight to string together the lyrics for Mo RPM, Less Problems (the title could use some work). 

Employee expectations for IT tools and services are being set by products that span work and home — like Excel. The boundary lines between work and our personal lives may have blurred a lot over the last few years, but that doesn’t mean they have disappeared entirely — as a recent story involving Excel spreadsheets proves. The U.K.’s Mail Online newspaper did some research into a number of employers trying to offer some words of warning to potential job candidates who trip themselves up by acting just a little too casual when they’re being interviewed. “‘Interviewee said her Microsoft Excel skills were ‘on fleek’ in an interview. You are interviewing at a professional organization. Don’t use slang and pop culture vocabulary,’ a frustrated employer wrote on (social media service) Reddit,” the paper reported. “‘Yes I know what on fleek means. But I’m trying to employ the best. The professional world is not charity. I don’t owe you a job just because you have a piece of paper.’” “Some methods of developing software are helping alleviate those costs, but there’s no question that ease of use is paramount in areas like finance.” For the uninitiated, “on fleek” is basically another way of saying “on point,” so the candidate in question apparently believed her ability to use spreadsheets matched what the job required. Besides the obvious lesson here, though, the Mail Online story is a good reminder that, while the way we talk about it may be different in the office vs. home, Excel is an application with a huge presence in both worlds. That gives it a unique advantage, but it also shows how technology in general needs to evolve. Consumer Vs. Enterprise Ease Of Use A story on CIO.com recently looked at this in some detail, offering some case studies and examples of how organizations are trying to take a more “user-centred” approach to software and devices in a way that empowers, rather than inhibits them. “Companies are asking why the enterprise applications that their employees, customers and partners use every day can’t be as simple and intuitive to use as the apps on their smartphones,” the article said. “Complex, confusing enterprise applications can disenfranchise employees, but high costs has made it difficult for some companies to make a business case for simplified, easier-to-use applications.” Some methods of developing software are helping alleviate those costs, but there’s no question that ease of us is paramount in areas like finance. While the complexity behind the database, analytics and other functions will always need to be there, what happens on the front lines has to be intuitive. Many companies know this, which is probably why a recent survey report from LinkedIn noted that, for roles like financial analyst, the top skills include accounting, financial modelling and (you guessed it), Microsoft Excel. The future of finance will be largely about the sophisticated use of data by CFOs and their teams. No matter how powerful the back end, though, the accessibility of the interface has to be on point. Or, if you’re reading this at home, “on fleek.” The post Why Consumer-Friendly Technology Has A Place In the Enterprise, Too appeared first on Blog | Vena Voice | Vena Solutions.