This post was first published in 2020, and updated on December 8, 2021.
Business continuity planning is more important than ever. Today, we will share the key insights finance teams really need to know when it comes to this practice.
It’s no secret that the world is still navigating unprecedented uncertainty right now. The ripple effects from the past (almost) two years have upended the economy, forcing companies around the globe to shift strategies, explore alternative business models, and make on-the-spot operational changes.
For finance leaders, in particular, this presents a tremendous challenge. As strategic partners to the business whose insights help influence key decisions, how can finance pros help their organizations weather the storm? And how can they do so while also planning for sustained growth?
The answer to that question is multifaceted and will vary between companies depending on size, structure and industry. But one key principle rings true—every organization needs to have a business continuity plan (BCP). Or at least prepare to develop one quickly.
Business Continuity Planning in Finance
Business continuity planning involves policies and procedures that keep the company running during transformational periods or in the wake of a major disruption.
For finance leaders, aspects of continuity planning can include re-aligning capital investments, taking on some debt. Alternatively, ensuring there’s enough cash on hand to cover any unforeseen expenses.
As resident experts on the drivers of revenue and growth in an organization, finance leaders know better than anyone how to keep their companies in the black.
Efficient and Agile Planning
But finance pros can’t plan effectively without clear and up-to-date insights into long-term business implications. This is why rolling forecasts are so important to maintain. Unlike static annual budgets, rolling forecasts are based on real-time financial data. They typically look ahead at least five quarters beyond the original budgeted period.
(Discover the best rolling forecast software by clicking here)
With rolling forecasts, finance pros have the flexibility to change their plans quickly for easy analysis of how new budgetary assumptions would affect the company’s outlook for the next two to three years or more.
That level of foresight enables leaders to confidently chart the best path forward through uncertain times. It also helps them sleep soundly, knowing their decisions are based on reliable, actionable data.
Perhaps even more important during times of uncertainty? Fast and efficient integrated planning. And this means aligning every business function toward the same strategic goal.
After all, finance leaders can’t be expected to take the helm of a company’s continuity planning process. Especially without support from the entire crew during periods of change.
(We break down the basics of extended and integrated planning in this post)
How to Foster Transparency AND Prioritize Efficiency in Business Continuity Planning
To foster transparency, accountability and collaboration while still prioritizing efficiency, finance leaders need to ensure that:
- They have a single source of truth for all financial and non-financial company data.
- All internal stakeholders have visibility into the planning process and the means to actively participate.
All of this is much easier said than done, even for the savviest finance leaders out there.
At the end of the day, an effective integrated planning process requires an agile analysis of critical metrics and the ability to consolidate data from multiple sources for fluent, more accurate reporting.
Suppose finance teams are bogged down with manual Excel processes and locked into static annual budgets. In that case, they’ll have a much harder time responding quickly to adverse conditions requiring more forward-thinking analysis.
(Before you go, don’t miss the ultimate guide to financial reporting next)
With a clear plan, the proper tools and the right resources at their disposal, finance leaders won’t have to fear periods of uncertainty. Instead, they’ll be able to confidently approach every situation and develop a data-driven game plan—ultimately aligning the entire company on strategy and leading the charge toward updated targets and goals.
And, of course—we’re here to help. Vena offers solutions for businesses of all kinds that make planning, reporting, and other critical processes more efficient and successful. Learn more here.
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