Modern finance needs modern tools.  To empower finance teams today, this means implementing a financial planning and analysis (FP&A) platform that delivers. But what exactly should you be looking for to keep your business on track? As the heartbeat of financial planning and business analysis, FP&A processes are critical to organizations today—keeping your business running smoothly by enabling planning, forecasting and analysis. But to drive invaluable data-driven decision making and ensure your team has everything they need to thrive, those FP&A processes must rely on a financial platform that’s powerful, function rich and intuitive to use. So how do the current FP&A solutions on the market measure up? How do you know which one is the best for your business needs?  Keep reading for an overview of seven of the top FP&A and financial planning software tools on the market—and the pros and cons of each. What Is Financial Planning and Analysis (FP&A)? Financial planning and analysis (FP&A) comprises the planning, budgeting, forecasting and analytical processes that together support your organization’s business and financial decision making. Through cross-functional analysis, it helps you build your future goals, measure ongoing financial performance and forecast upcoming results.  To achieve all of that, modern FP&A teams rely on financial planning software. Gartner defines financial planning software as “a key tool that enables organizations to manage their enterprise-wide financial planning, forecasting and budgeting process.” It empowers businesses to “plan and analyze business financial strategy for the organization across all three financial statements (profit and loss, balance sheet and cash flow).” Typically, financial planning software also supports scenario modeling, collaboration, analytics, budgeting and performance reporting.  Let’s dig a little deeper into FP&A and how to choose a financial planning software that truly supports it. How Do You Do FP&A? As strategic partners to the entire business, FP&A teams are responsible for communicating and collaborating across departments. That means collecting company-wide data to fuel organization-wide planning,  look ahead and contribute to strategic decision making. It also means making informed financial decisions to ensure your business continues to thrive. Several key duties are taken on by the FP&A team, including: Analyzing assets, investments and your current return on investment (ROI) Deciding how to use cash flow Calculating key financial ratios to determine financial health Analyzing your products and services to see where the most net profit is made and which products have the highest and lowest profit margins Determining the cost efficiency of each department and whether resources are allocated in the best possible way—and working with those departments to build effective budgets Reporting to leadership and building out the financial models and forecasts that support their ongoing decision making Comparing budgets and forecasts against historical results, mapping out growth plans and looking for expansion opportunities To build efficiencies into the key processes that support those duties, organizations need an FP&A platform that fits their needs. How To Choose the Best FP&A Platform To empower your FP&A processes, you require a technology platform that will drive confident and connected decision making and ensure business-wide accountability. One that offers data analytics, guides business intelligence, lets you share actionable and scalable insights across your organization and drives strategic business planning and up-to-the-minute analysis. To achieve that, your financial planning platform should have:  Powerful BI cloud and AI capabilities Access to real-time analytics at scale  Functionality that drives operational alignment and accountability  Collaboration tools that let you share insights across cross-functional teams  Multidimensional modeling and scenario analysis capabilities Unified data control and security to ensure your data is protected An intuitive, easy-to-use interface  Ultimately, the tool you choose should connect your data, be intuitive for users and stay scalable to your business needs—letting you remain agile and proactive as you continue to grow. The Best FP&A and Financial Planning Software 1. Vena An out-of-the-box, no-code solution, Vena’s FP&A platform brings your financial and operational data to life with interactive visualizations that improve the way your teams communicate, collaborate and find creative solutions to complex business problems.   Vena empowers confident and connected decision making and business-wide accountability. It makes it easy to share actionable, scalable, AI-driven business insights and empowers strategic planning and agility at every level with guided business intelligence. And with extensible APIs, native integrations and multidimensional modeling capabilities, Vena enables you to go from data readiness to deep insights to peak business performance in an instant—all within a secure, complete planning platform. Key Functionality and What Makes Vena Easy To Use Built around a familiar Microsoft Excel foundation, Vena is flexible and intuitive, empowering FP&A teams to: Enhance strategic decision making, with self-serve access to data analytics and instant AI-powered insights using configurable dashboards that answer critical business questions, find creative solutions to complex problems and power proactive decision making Drive operational alignment and accountability, to easily communicate the impact of investment decisions, enhance visibility into business performance and help teams determine what drivers they need to focus on to optimize operations with effective data management and easy-to-understand visualizations Future-proof analytics and insights by leveraging out-of-the-box embedded and guided business intelligence, with instant access to Microsoft’s ongoing artificial intelligence (AI) and machine learning (ML) updates Centralize data in a secure environment, with unified data control and security, including sensitivity labeling, end-to-end encryption and real-time access monitoring Empower cross-departmental collaboration, enhancing the visibility of business performance and supporting communication to all stakeholders Vena’s Complete Planning solution is self-service, secure and interactive—connecting teams, enabling collaboration and facilitating data-driven cultures. All with Excel at the core, meaning you don’t have to abandon the tools you’re comfortable with in order to scale.    Vena Native Microsoft Excel User Interface Offers a native Excel experience, including all formatting and custom formulas ✅ Collaboration and Sharing Lets you collaborate, tag and comment directly in Excel ✅ Central Database Provides a unified solution that’s centrally architected and designed to support minimal system maintenance ✅ Integrations Offers native API integrations to industry standard systems (GL/ERP/CRM) as well as publicly available API integration to hundreds of additional source systems ✅ Process Management Includes flexible and visual workflows for all input, business rules, review and reporting tasks across any process ✅ Security and Compliance Provides a single, integrated security model with auditability ✅ Modeling Offers integrated and common data models for financial and operational forecasting, budgeting and reporting  ✅ Microsoft Power BI Embedded Has natively built reporting and insights with an industry-leading business intelligence tool ✅   Want to see Vena in action? Sign up for a 7-day Vena Preview. 2. Planful Used to streamline business-wide planning, consolidation, reporting and visual analytics, Planful lets you see performance data at scale, automate, improve reporting and align planning processes. Their financial performance management software is meant largely for bigger FP&A teams and CFOs looking to streamline their planning efforts.  Key Functionality and What Planful Does Well: Offers collaboration and sharing tools with a web-based user interface Adheres to common security and compliance requirements Provides consistent and customizable financial reporting  Planful Weaknesses: Fragmented platform and disconnected planning and reporting, mixing legacy database technology with different database for dynamic planning Challenging to maintain, requiring significant IT and technical support Data modeling is complex and challenging to configure Requires third-party technology for full breadth of FP&A and financial close processes Limited Excel add-in, with no way to easily export live reports into Excel.  Does not support Mac operating systems How Does Vena Compare With Planful?   Planful Native Microsoft Excel User Interface Offers a native Excel experience, including all formatting and custom formulas ⚠️ Collaboration and Sharing Lets you collaborate, tag and comment directly in Excel ✅ Central Database Provides a unified solution that’s centrally architected and designed to support minimal system maintenance 🆇 Integrations Offers native API integrations to industry standard systems (GL/ERP/CRM) as well as publicly available API integration to hundreds of additional source systems ✅ Process Management Includes flexible and visual workflows for all input, business rules, review and reporting tasks across any process 🆇 Security and Compliance Provides a single, integrated security model with auditability ✅ Modeling Offers integrated and common data models for financial and operational forecasting, budgeting and reporting  ⚠️ Microsoft Power BI Embedded Has natively built reporting and insights with an industry-leading business intelligence tool 🆇 3. Anaplan Anaplan is a web-based, enterprise-level business modeling and planning platform. It serves multiple areas across the business, including finance, marketing, sales, supply chain and workforce management. Anaplan offers forecasting and scenario modeling capabilities, with real-time access to data and collaboration capabilities.  Key Functionality and What Anaplan Does Well: Can be scaled across the organization Supports complex calculations Is highly customizable to accommodate multiple use cases Anaplan Weaknesses: Steep learning curve for modeling and configuration Configuration solutions can be complex and challenging to maintain There are no pre-configured starter models Modeling is complex and difficult to use and maintain How Does Vena Compare With Anaplan?   Anaplan Native Microsoft Excel User Interface Offers a native Excel experience, including all formatting and custom formulas  🆇 Collaboration and Sharing Lets you collaborate, tag and comment directly in Excel  ⚠️ Central Database Provides a unified solution that’s centrally architected and designed to support minimal system maintenance ⚠️ Integrations Offers native API integrations to industry standard systems (GL/ERP/CRM) as well as publicly available API integration to hundreds of additional source systems  ✅ Process Management Includes flexible and visual workflows for all input, business rules, review and reporting tasks across any process 🆇 Security and Compliance Provides a single, integrated security model with auditability ✅ Modeling Offers integrated and common data models for financial and operational forecasting, budgeting and reporting  ✅ Microsoft Power BI Embedded Has natively built reporting and insights with an industry-leading business intelligence tool ⚠️ 4. Prophix Prophix’s corporate performance management (CPM) software is designed mostly for finance teams at mid-market organizations. It improves profitability and minimizes risk by automating budgeting, forecasting, reporting and consolidation-to-close processes for better decision making. Prophix is available in the cloud or on premise. Key Functionality and What Prophix Does Well: Supports multiple use cases Makes it easy to build custom reports Has 20+ years of category and industry experience Prophix Weaknesses: Limited Microsoft Excel integration Weak business intelligence and machine learning integrations or tools Template creation is cumbersome and difficult to use The combination of cloud and on-premise deployments are not at feature parity Rigid and inflexible workflow, not adaptable for different business processes How Does Vena Compare With Prophix?    Prophix Native Microsoft Excel User Interface Offers a native Excel experience, including all formatting and custom formulas ⚠️ Collaboration and Sharing Lets you collaborate, tag and comment directly in Excel ⚠️ Central Database Provides a unified solution that’s centrally architected and designed to support minimal system maintenance ✅ Integrations Offers native API integrations to industry standard systems (GL/ERP/CRM) as well as publicly available API integration to hundreds of additional source systems ⚠️ Process Management Includes flexible and visual workflows for all input, business rules, review and reporting tasks across any process ⚠️ Security and Compliance Provides a single, integrated security model with auditability ✅ Modeling Offers integrated and common data models for financial and operational forecasting, budgeting and reporting  ⚠️ Microsoft Power BI Embedded Has natively built reporting and insights with an industry-leading business intelligence tool 🆇 5. Workday Adaptive Planning Workday Adaptive Planning is an enterprise planning and analysis solution designed to empower collaboration, insights and agility. It offers modeling and analytics functionality for organizations of all sizes, with customizable offerings for different use cases.  Key Functionality and What Workday Adaptive Planning Does Well: Has brand recognition and a large customer base Is customizable to certain use cases, including workforce planning, sales planning and financial planning Offers flexibility to create sheets and views based on the needs of business users Workday Adaptive Planning Weaknesses: Not a native Microsoft Excel integration, but instead uses proprietary modeling and formula language Has a steep learning curve, with weak support and implementation services Has performance issues and system limitations   How Does Vena Compare With Workday Adaptive Planning?   Adaptive Native Microsoft Excel User Interface Offers a native Excel experience, including all formatting and custom formulas 🆇 Collaboration and Sharing Lets you collaborate, tag and comment directly in Excel ⚠️ Central Database Provides a unified solution that’s centrally architected and designed to support minimal system maintenance ⚠️ Integrations Offers native API integrations to industry standard systems (GL/ERP/CRM) as well as publicly available API integration to hundreds of additional source systems ⚠️ Process Management Includes flexible and visual workflows for all input, business rules, review and reporting tasks across any process ⚠️ Security and Compliance Provides a single, integrated security model with auditability ✅ Modeling Offers integrated and common data models for financial and operational forecasting, budgeting and reporting  ⚠️ Microsoft Power BI Embedded Has natively built reporting and insights with an industry-leading business intelligence tool 🆇 6. Datarails Datarails is a financial planning and analysis platform that offers automation, visualization and consolidation capabilities. Finance teams can benefit from the spreadsheets and financial models of Excel while automating their financial reporting and planning. Key Functionality and What Datarails Does Well: Offers a low-cost option that makes it a good starter solution Offers a point solution for financial budgeting, planning and reporting Connects to Microsoft Excel using legacy desktop ribbon technology Datarails Weaknesses: Does not support extended, scalable planning use cases beyond traditional financial budgeting, planning and reporting Flexibility and modeling is difficult and requires Datarails support to aid in setup and maintenance The product is in development and has performance issues, with key features and capabilities missing The Excel add-in requires installation How Does Vena Compare With Datarails?   Datarails Native Microsoft Excel User Interface Offers a native Excel experience, including all formatting and custom formulas ✅ Collaboration and Sharing Lets you collaborate, tag and comment directly in Excel ⚠️ Central Database Provides a unified solution that’s centrally architected and designed to support minimal system maintenance ✅ Integrations Offers native API integrations to industry standard systems (GL/ERP/CRM) as well as publicly available API integration to hundreds of additional source systems 🆇 Process Management Includes flexible and visual workflows for all input, business rules, review and reporting tasks across any process 🆇 Security and Compliance Provides a single, integrated security model with auditability ⚠️ Modeling Offers integrated and common data models for financial and operational forecasting, budgeting and reporting  ⚠️ Microsoft Power BI Embedded Has natively built reporting and insights with an industry-leading business intelligence tool 🆇 7. Cube Cube is an FP&A platform that provides real-time financial and operational data access. It enables strategic planning, reporting and analysis within a spreadsheet environment, with flexible use cases across functions. Key Functionality and What Cube Does Well: A niche FP&A solution, it lets you get started fairly quickly Provides customizability and flexibility Offers top-rated customer service and support Cube Weaknesses: Has limited security with no way to restrict what users can access The product is relatively newer and immature technology, with a limited feature set and functionality that's still lacking There are modeling limitations, with a limited number of dimensions your organization can have How Does Vena Compare to Cube?   Cube Native Microsoft Excel User Interface Offers a native Excel experience, including all formatting and custom formulas ✅ Collaboration and Sharing Lets you collaborate, tag and comment directly in Excel ✅ Central Database Provides a unified solution that’s centrally architected and designed to support minimal system maintenance ⚠️ Integrations Offers native API integrations to industry standard systems (GL/ERP/CRM) as well as publicly available API integration to hundreds of additional source systems ⚠️ Process Management Includes flexible and visual workflows for all input, business rules, review and reporting tasks across any process 🆇 Security and Compliance Provides a single, integrated security model with auditability ⚠️ Modeling Offers integrated and common data models for financial and operational forecasting, budgeting and reporting  🆇 Microsoft Power BI Embedded Has natively built reporting and insights with an industry-leading business intelligence tool 🆇 Conclusion To get the most out of your FP&A team and processes, you need a financial planning platform that will enable those processes, empower your team and help you exceed your business goals.  That makes choosing the right solution crucial. Understanding what you hope to achieve, the functionality you need to accomplish those goals and the learning curve to expect for your team should all play a part in making that decision. From there, it’s all about carefully comparing the pros and cons to make sure you get the solution that best meets all your needs—then putting your new platform to use to make your organization’s objectives a reality. Frequently Asked Questions What should I look for in FP&A tools? What you should look for in your FP&A tools depends on your most pressing needs and the planning processes you have in place. You should also consider your people and the change involved in bringing in any new technology investment. Look for a familiar, flexible interface that lets your team stay agile and proactive, is scalable as your business grows and connects your data for more informed analysis and decision making. Automation, collaboration and visualization functionality are also key if you hope to fully empower your FP&A team. What does FP&A software do? Gartner says financial planning and analysis (FP&A) software supports “the office of finance’s budgeting, planning and forecasting efforts. Many also supplement the office’s budgeting and planning process support with modeling, collaboration analytics and performance-reporting capabilities, to increase its ability to manage performance by linking corporate strategy and execution.” It empowers you to better understand your business’s overall financial health, look ahead to make better decisions for the future and collaborate on budgeting and planning. What is xP&A and how is extended planning different from FP&A? According to Gartner, extended planning and analysis (xP&A) “extends” traditional FP&A solutions focused solely on finance into other planning domains—such as workforce planning, sales, operations and marketing. Solutions that enable xP&A help organizations exploit the challenges faced when introducing new cloud-based business processes and navigating economic uncertainties. In other words, this tech-powered planning approach enables finance teams to build agility, resilience and alignment into financial, strategic and operational planning. What other solutions does Vena provide? Vena offers solutions across FP&A, sales performance management and financial close management. We also have pre-configured industry solutions designed specifically for banking and credit unions, SaaS, insurance, manufacturing, real estate, hotel and lodging, higher education, healthcare, professional sports, not for profit and professional services.  

As a finance professional or business owner, scenario planning plays a big part in the future success and well-being of your organization. For this reason, it’s critical to understand the ins and outs of scenario planning, ranging from why it’s important to the tools you can use to complete the process. What Is Scenario Planning? Scenario planning is a method of financial planning with which you mitigate future risk by identifying assumptions and determining in advance how your company will respond. For example, projecting estimated future cash flow allows you to plan for all scenarios, including both an increase and decrease. Scenario planning can be completed across your entire company or within individual departments. For example, finance departments often run scenario planning on their own. However, there are times when they’ll collaborate with other departments to better understand the potential impact of business decisions, such as expanding a product line. Why Is Scenario Planning Important? Scenario planning helps organizations adapt and be prepared for change. Scenario planning gives executives and business leaders insights into different situations an organization might find itself in. Being able to plan for different scenarios enables executives to make decisions more effectively.  4 Key Steps Of The Scenario Planning Process It’s been said multiple times in this guide, but it’s worth mentioning again: the scenario planning steps that one company takes won’t be identical to the next company. Don’t make decisions based on what your competitors are doing. Make decisions based on what’s best for your organization. Here’s a four-step scenario planning structure to help guide the process: 1. Identify the Questions You Want To Answer This varies from company to company and from model to model. Identifying the questions you want to answer sets the table for the steps to come. Common questions include: What technology is needed to remain relevant in three years, five years or 10 years? What’s the best way to plan against a changing economic climate? How can your company prepare financially for another pandemic? Even if you start with a list of defined questions, your approach could change as you get started. You may find that there are additional questions to address. 2. Determine Who To Involve The first question to answer is this: Does scenario planning involve your entire company or only one (or several) departments? Once you answer that question, you can more easily determine who to involve. Even in the smallest of companies, scenario planning isn’t generally a one-person task. It takes several individuals—or more—to manage and carry out this process. 3. Make Note of External Factors Scenario planning isn’t all about what’s happening internally. Sure, this is a big part of the process, but you should also consider external factors. These can include details such as: Technology Economics Political  Social  While you have control over what happens internally, external factors are likely to come into play over the long run. 4. Choose the Right Type of Scenario Planning There are four general types of scenario planning: Normative scenario planning Operational scenario planning Quantitative scenario planning Strategic management scenario planning You can’t get started with the actual scenario planning process until you know which type you’re using. Tip: don’t force yourself to take steps that don’t align with your company, its goals and/or the resources available to you. These four steps can act as a framework, but make adjustments as necessary. What Are The Benefits Of Scenario Planning? Gives you the confidence that you’re prepared for anything and everything that could happen Helps you understand the key components of organizational performance Reduces bias Helps you manage uncertainty more effectively  Produces more accurate budgets, forecasts and strategic plans Enables collaboration between departments  Creates new (and potentially better) ways of doing things Also, scenario planning provides an advantage over the competition as you’re able to react quickly, concisely and decisively because you already have a plan. You’ve thought through your options and documented them accordingly. This reduces panic and poor decision making should a crisis move to the forefront. Are There Any Disadvantages of Scenario Planning? This is a legitimate question that you need to address before getting started. The biggest drawback is that scenario planning can eat up a lot of company resources. It’s a lengthy process that generally involves a large number of people. You can expect it to take several months from start to completion. Scenario planning isn’t something you do once and forget about until you need to take action. Constant reviews and updates are required. Even with these potential drawbacks, the benefits of scenario planning far outweigh the disadvantages. 5 Different Types of Scenario Planning There’s no one-size-fits-all solution to scenario planning, but there are four distinct types to consider: Normative Scenario Planning Normative scenarios focus primarily on the statement of goals, as opposed to objective planning. These goals don’t have to correspond with your company’s vision. Instead, they’re based more on how you want to operate over the short and long term. On its own, normative scenario planning isn’t as powerful as some of the other types. However, when combined with other scenarios, it’s a solid choice. Operational Scenario Planning Operational scenario planning is one of the most common types of scenario planning, as it touches on the direct impact of a specific future event. It allows you to better understand strategic implications and to plan accordingly. Quantitative Scenario Planning It often helps to look at future situations from a best and worst-case point of view. And that’s exactly what you get with quantitative scenario planning. It also allows you to make quick adjustments by altering a variety of variables. This form of scenario planning is most common when creating budget forecasts. Strategic Management Scenario Planning This type of scenario management focuses less on the company itself and more on the manner in which products and/or services are used. This is among the most challenging types of scenario planning as you must have comprehensive knowledge of your industry, local and national economics and the global landscape. Sensitivity Analysis vs. Scenario Analysis It’s a common misconception that scenario analysis and sensitivity analysis are one and the same. We’ve talked about scenario analysis and planning to this point, so let’s dive deeper into sensitivity analysis. Here’s a definition shared by Paro: “Sensitivity analysis can also be helpful to quantify and analyze different outcomes. However, it differs from scenario analysis because sensitivity analysis only alters one input. It then shows how sensitive the projections are to that variable.”   There are times when scenario analysis is all you need. The same holds true of sensitivity analysis. However, there are also situations in which it makes sense to use them both. Best Practices for Scenario Modeling Don’t go into scenario modeling with the mindset that you have to do things a certain way. This can back you into a corner, making it a challenge to maximize your efforts. A better approach is to rely on best practices, all while taking your company’s individual needs into consideration. Here are four best practices to guide you: 1. Use Data to Your Advantage Without the right data, executing on agile planning is an impossibility. Sure, you could make educated assumptions, but that’s not what scenario planning is about. Every decision you make should be backed by accurate data. Some examples of data include sales volume data from your customer relationship management (CRM) software, headcount data, sales pipeline health and historical data.  You won’t use every data point at your disposal, but it doesn’t hurt to closely review it to determine what you can employ. 2. Choose the Right Variables There are two things to remember here. First and foremost, you have to choose the right variables. Secondly, you don’t want to overdo it. For example, here’s an excerpt from our best practices blog post: “Identify your levers from all of the metrics at your disposal. Then start with the plan and execute with the budget or forecast. When making decisions about financing, operational changes and more, consider your values and strategic priorities. Then work to remodel your KPIs, business assumptions and expected business performance accordingly.” Just because you have a particular metric at your disposal doesn’t mean you need to work with it. You need to choose the right variables at the right time. 3. Run Three Basic Scenarios This is based largely on the old saying “hope for the best, but plan for the worst.” The only difference is that you’re adding another scenario: status quo. Your three basic scenarios should include: Low: Consider this the worst-case scenario. It shows that sales and revenue are dipping and you need to examine your business model to improve the likelihood of turning things around in the future.  Medium: This is “business as usual”, such as if your growth remains the same as the last quarter. Identify what business as usual entails so you know how to run this scenario.  High: This scenario is based on sales and demand increasing, resulting in additional revenue. Of course, it also has the potential to bring challenges to your organization, such as those with staffing. 4. Use a Break-Even Analysis The goal of break-even analysis is to determine what you need from each variable to continue performing at the same level. You can use it to answer questions such as: What sales volume is required to continue operating in the same capacity? Do you have variable costs that are likely to change in the near future? What about fixed costs? What steps can you take to lower your break-even point? Break-even analysis is a useful tool for scenario modeling as it can help you better understand your company’s required performance in relation to the three basic scenarios as detailed in #3 above. Common Questions Associated With Scenario Planning  It doesn’t matter if you’re new to scenario planning or have gone through this process several times in the past, you may have questions. It’s best to address any questions and concerns as they arise, to avoid future complications. Here are 10 common questions associated with scenario planning: Who needs to be involved with scenario planning? What’s the best way to plan for external factors over which you have no control? How much will scenario planning cost? How long will it take to complete your scenario planning? What’s the best way to measure scenario planning success? How will scenario planning change your company’s day-to-day approach to business? How will you know if a particular scenario that you planned for is playing out? How will you know which plan of attack to roll out to deal with a specific scenario? How often should you review your scenario plan?  What are your primary objectives? Maybe some of these questions have been bogging you down. Or perhaps all of them have been on your mind. Even if you only have one or two questions to answer, address them as quickly as you can. Summary By now, it’s our hope that you have a thorough understanding of all things related to scenario planning. With this knowledge, you can take the steps necessary to plan for any situation your company could face in the future.  And remember, there’s no “exact science” to scenario planning. A lot of what you do comes down to the specific requirements of your organization. The more time you spend on scenario planning the more comfortable you’ll become.  If you’re ready to get started with scenario planning, contact us online to request a free demo. We’ll walk you through our scenario planning and analysis software to help you better understand the way it can positively impact your business.

This blog was originally published in 2019 and updated on December 8, 2021. What is Account Reconciliation? Account reconciliation is the matching and validating balances in the general ledger (GL) to external and internal sources or other independent calculations to ensure that month-ends and year-ends are closed accurately. (Click here to learn more about our account reconciliation software) Data sources used to remediate and reconcile account balances include sub-ledgers for HR and fixed assets, bank statements and accounts receivable and payable schedules. For both internal and external sources, every balance must match its corresponding account in the GL. Intercompany transactions, currency exchange rates and various non-cash activities only generate more complexities in an already complicated, time-consuming process. A well-planned account reconciliation process includes an audit trail, workflow automation and supporting information to ensure that all accounts balance out. But at the same time, the process is transparent and clearly justified for everyone involved. The Ultimate Goals of Account Reconciliation In accomplishing these objectives, proper account reconciliation: Gives management a timely and accurate picture of last period’s performance. Demonstrates the organization’s financial integrity to internal and external stakeholders—including accurate and transparent regulatory reporting. Provides real-time data or “actuals” to the accounting and financial planning and analysis (FP&A) teams to perform variance analysis and re-forecasting. Internally, proper account reconciliation also provides process benefits, including reducing the time it takes to close, consolidate and prepare financial statements for every reporting period while improving and automating internal control measures. What’s more, it’s a process that’s ripe for automation—but frequently done in a manual, time-intensive and error-prone manner. What Happens Without a Proper Account Reconciliation Process? Without a proper, automated account reconciliation process, organizations may encounter a range of problems arising from: Large numbers number of accounts and corporate entities and the complexity of sub-ledgers and other systems involved—from payroll systems to bank statements. Bottlenecks in the period-end close from unexplained exceptions—accounts requiring adjusting entries to balance out—that prevent timely and accurate identification, review and reconciliation. Fraudulent or negligent accounting practices that go undetected due to unreconciled accounts, poor internal controls or a lack of supporting documentation, commentary or calculations. Account reconciliation is the bedrock of accurate, efficient, compliant and timely financial statement delivery. Account reconciliation must be treated as a priority and critical path in the period-end close process to provide a complete and accurate picture of a company’s financial performance. Recap: Accounting 101 The origins of account reconciliation and accounting itself date back to the 15th century. The basic premise is an accounting fundamental: for every journal entry posted to the GL, debits and credits must be equal, matching up with any sub-ledgers or supporting transaction records. A standard transaction entered into the general journal, by definition, balances out; it’s reconciling those against any number of sub-ledgers and external records that makes the process complicated. Today’s modern accounting, enterprise resource planning (ERP) and GL systems have built-in controls to prevent unbalanced journal entries from being posted to the general ledger. The tricky part comes with exceptions—accounts that don’t match their corresponding sub-ledgers or other transaction systems. Exceptions require adjusting entries to balance out. This is where accounting teams can spend a huge amount of time—reviewing, investigating and finding the supporting explanations and calculations to make the appropriate adjusting entries for each exception to ensure an accurate, supported reconciliation. Reconciliation Processes The reconciliation process happens at the end of every reporting period—monthly, quarterly and annually—to ensure every GL account matches the balance of its corresponding sub-ledger or external transaction system. The process typically involves three distinct stages once the initial books are closed, and trial balances are created for the period. Four-step account reconciliation process Reconciling the trial balances for accounts in the general ledger with corresponding accounts in sub-ledgers or other secondary transaction systems, primarily including: Sub-ledgers – two of the most common include payroll or human resources information systems (HRIS) and fixed asset tracking (FAST) systems. Bank statements – for the cash or bank reconciliation process, it’s critical that the balance in the bank matches what the cash balance shows on a balance sheet. Roll-forward schedules – the closing balance for every account (e.g. depreciation, prepaid assets, accounts payable and receivable) at the end of one period should equal the opening balance at the start of the next one. Adjusting entries and ensuring they’re all reviewed, investigated and approved before posting to the GL. Reconciling and making adjusting entries are complicated processes and where most bottlenecks in the close process take place. This is where accountants spend the bulk of the close cycle, acting as detectives and internal auditors to find the source of every exception and the supporting information to explain them. Providing supporting calculations and documentation where required (e.g., if an account doesn’t balance by a wide margin, explain why). External auditors, regulators and even senior management all need trusted numbers and transparency and documentation to find the sources and explanation for every exception quickly. Preparing financial statements, regulatory filings and other reports for the period. And with account reconciliation done right, the results should be based on 100% reliable numbers. The more reliable your numbers are, the more confident your internal and external stakeholders will be. The importance of proper documentation Documentation of the entire reconciliation and financial close process is necessary for internal visibility. Not to mention, also for auditors and 21st-century reporting regulations to satisfy: Reporting regulations such as Sarbanes Oxley (SOX) prescribe what needs to be reported and the process documentation needed to accompany them. Transparency and visibility requirements of external auditors for faster auditing with greater confidence. Consistency and continuity of processes, ensuring that they are maintained across departments and over time. Why Is Account Reconciliation So Important? The month-end close, adjusting entries, posting to the GL and generating financial statements and reports are only part of the story in what’s referred to as the full-spectrum of FP&A activities. Gone are the days when finance and accounting functions existed in silos; now, they feed each other to learn from past performance, optimize present performance and maximize performance in the future. Still, it’s only after undergoing rigorous reconciliations and analysis that it’s possible to prepare reliable financial statements with confidence. Account reconciliation is a critical item in the financial close process because: It’s the foundation for most internal controls that are crucial for protecting the company’s assets. It’s required before month/year-end reports, and financial statements are issued. Properly documented account reconciliation provides full internal visibility and is essential for meeting regulatory reporting requirements with confidence. Account Reconciliation and Full-Spectrum FP&A Every business needs to close its books. It’s not an option. But the larger the business, the more shareholders it has, the more complex its accounts and operations, the more complicated the process becomes. And more importantly, having a reliable, streamlined and automated account reconciliation process becomes, too. Best practices dictate that companies close their books monthly to report on the previous month’s financial performance (or actuals), allowing management to stay on top of the company’s financial health and meet its reporting obligations. A critical part of the month-end close includes account reconciliation—ensuring the actuals are accurate, reliable and timely. The modern, full-spectrum approach to FP&A depends on the delivery of these actuals so that the more forward-looking and planning-based phases of the FP&A cycle can take place. Actuals are needed for: Creating rolling forecasts, analyzing variances between their actuals and forecasted numbers and determining any course corrections required of a company to stay on track to meet its performance targets. (Click here to learn more about rolling forecasts to learn more about rolling forecasts) Providing FP&A teams with the actuals, insights and credibility to play a more strategic role in the organization and using these data to inform smarter business decisions and plans. Continuous monitoring of financial and operational metrics to improve efficiency and accuracy with each iteration and provide fully transparent performance reports to stakeholders, auditors and regulators. Manual Reconciliation vs. Automation Account reconciliation is often the bottleneck in closing the books on time. Numerous accounts have to be analyzed and reconciled each month. When performing these reconciliations manually, the sheer volume can make the task seem insurmountable. Automation is the key here. In fact, with the right tools and technology, it’s not uncommon to reduce the time to complete the financial close by 50% or more. (Visit this link to learn how we did just that for Capstone Infrastructure) With the proliferation of financial process automation systems today, it’s possible to automate unnecessarily manual and time-consuming tasks across functions and applications. This is particularly important in: Connect your GL, sub-ledgers, and other source systems directly to the software you use for account reconciliation and feed into budgeting, forecasting, and other FP&A software functions. Identifying exceptions to review, adjust, reconcile and post to the GL in final form. Facilitating workflow automation throughout the process of identification, remediation and reconciliation. The following areas—each involving a high degree of manual effort to balance against the general ledger (GL)—make a compelling case for automating the account reconciliation process wherever possible: Sub-Ledger Balances Balancing the general ledger and sub-ledgers is a key control automated account reconciliation software that will post matching entries without manual review. When automated, it will take the manual effort out of identifying exceptions when accounts are unreconciled. This ultimately frees up hours or days of your accountant's time that they would otherwise spend posting accounts that need no reconciliation and searching for those that do. Instead, automated account reconciliation allows your accounting teams to focus where their expertise is most needed: investigating, remediating and reconciling only the GL accounts that are automatically flagged as exceptions for being out of balance with their corresponding sub-ledgers. From a technology standpoint, this identification step requires account reconciliation software that integrates with disparate, companywide sub-ledger systems—the most common being payroll and human resources information systems (HRIS) and fixed asset tracking systems (FAST). The value of automation is even more apparent if your organization has subsidiary companies or separate but related corporate entities. As the number of these entities grows, so does the complexity of the account reconciliation process and the overall volume of data, accounts and sub-ledger systems involved. Bank Reconciliations The bank reconciliation—or cash reconciliation—is the similarly time-consuming process of reconciling transactions when they exist in your general ledger but not your bank's reporting systems or vice versa. For example, a check is cashed at the bank before the corresponding journal entry is made in your accounting software. Automating the bank reconciliation process delivers much the same value as reconciling sub-ledger exceptions. Automation frees up your accountant's time from searching for those exceptions manually by flagging just the transactions requiring investigation and reconciliation. When you have multiple banks, accounts in the thousands and transactions in the millions each month, automation addresses an even greater degree of complexity and magnitude of transactions to review—a process that would otherwise take up days or even weeks of your accountant's time. Roll-Forward Schedules Roll-forward schedules are much the same as sub-ledgers when it comes to reconciliation. But instead of checking GL balances against data residing in other company systems, most schedules are kept in disparate, standalone spreadsheet files. Whether accounts receivable aging schedules or depreciation and amortization tables, roll-forward schedules can involve additional complications, including: Version control challenges when faced with a single schedule exist in multiple spreadsheet files across your organization. As with sub-ledgers, each schedule typically includes pre-determined rules for what supporting commentary, documentation, and calculations need to accompany certain adjusting entries (e.g. if balance differences exceed an acceptable threshold) before posting them to the GL. The basic check and balance of ensuring the closing balance of one period equal the opening balance of another. From maintaining version control and eliminating unnecessary manual review to configuring rules and GL integrations, the value of automation to roll-forward reconciliation should be clear to anyone who’s performed the process before. Workflow Automation If manually reviewing accounts and tracking down supporting documentation for exceptions weren’t time-consuming enough, most companies have month-end close and reconciliation workflows they follow to close out each period. Depending on the number and complexity of accounts, entities and the overall business, simply carrying out this workflow—completing the review step before forwarding it to another party for approval, for example—can be just as tedious as the reconciliation itself. Workflow automation allows checklists, roles, rules and processes for review, reconciliation and approval (or rejection) to be defined once and repeated regularly. It automatically marks adjusting entries as complete and routes them to the appropriate colleague for approval before posting, for example. And once built, workflow automation takes virtually all the manual effort out of the process. Automatic notifications, real-time status reports, routing tasks to the right roles, and posting transactions to the GL. These things, when complete, all go even further to make the account reconciliation process more accurate, efficient and rewarding for those involved. They also bolster the confidence of executives and external stakeholders in the numbers resulting from the process. Account Reconciliation Software Solutions There are numerous software options available to finance and accounting teams. And they are all designed to better manage and streamline the account reconciliation process! It’s not uncommon for smaller companies to use a combination of their accounting/GL software and a library of Excel spreadsheets. More sophisticated options for larger companies include: Point solutions such as Blackline (NASDAQ: BL) and Trintech focus solely on consolidations and account reconciliation. These are often trying to separate traditional FP&A solutions for budgeting and planning. GL reporting and account reconciliation modules from ERP “mega-vendors” such as Oracle, IBM or SAP. Modern, full-spectrum FP&A platforms offer everything from account reconciliation to scenario analysis through a single system. Ask yourself... Even if you have a modern ERP system in place that offers account reconciliation functionality, questions you should ask yourself include: Does the GL/ERP system post matching entries automatically? Is it flagging only the accounts that need review, remediation and reconciliation on the part of the accounting team? Is there a quick and intuitive way to explain each exception to management, auditors, regulators and other stakeholders—whether through external documentation, supporting calculations or references to changing exchange or interest rates, as just a few examples? Do audit trails and supporting calculations/explanations provide accounting teams with the ability to post newly reconciled/adjusted entries into the GL with confidence? The Excel Problem Aside from ERP systems, standalone Excel spreadsheets have played a dominant role with accounting and FP&A professionals for more than three decades. Based on survey data, about two thirds of finance professionals still rely heavily on standalone spreadsheets for accounting processes. Even financial close management and FP&A software with “Excel-like” interfaces have been unable to dethrone these standalone spreadsheets. Today, companies need to respond quickly to any situation with accurate, real-time information that Excel, on its own, cannot deliver. The main problems with Excel on its own include: There’s no single source of data, supporting calculations or comments. There are only disparate spreadsheets, which can lead to errors from discrepancies and version control issues. Excel lacks any robust workflow automation, version control, audit trails or underlying database. And simultaneously, the ability to scale to the demands of today’s mid-and large-sized companies. Processes that rely on error-prone data can easily lead to costly consequences for any business—particularly publicly traded or otherwise regulated companies. The Solution Whether choosing a point solution or full-spectrum FP&A platform for account reconciliation, there are three essential ingredients of a software solution—and they’re all related to automation: Connecting directly to source systems—from your GL, ERP systems or HRIS. Then, GL and sub-ledger accounts that match can be posted automatically. This also allows FP&A teams to pull live actuals into reports, forecasts and more. Automatically identifying accounts that don’t match. This frees up time by enabling teams to focus on the issues that require investigation and review. Facilitating automated workflows to eliminate manual work through all stages of the process, from review, remediation and reconciliation, to the creation and distribution of financial statements, management reports and self-serve analysis tools. For numerous reasons, the ideal solution is to pick a full-spectrum FP&A software solution. One that spans the FP&A cycle—from closing the books and regular forecasting to variance and scenario analyses and internal/external reporting. Today’s leading FP&A or corporate performance management (CPM) systems include workflow automation, version control, audit trails and other measures required for transparency and control. Last but not least, and not common enough among FP&A software, it’s vital to pick a solution that integrates directly with—and doesn’t try to replace—Excel and all its powerful functionality, even extending to add-ons like Power Pivot and Power BI. The familiarity finance and business users have with Excel goes a long way to speed up adoption. And ultimately, it contributes to better business-wide decision making and planning. Combined, these features provide companies and their account reconciliation teams benefits including: Financial statements, audits, regulatory and management reports based on a single source of trusted, accurate numbers with guaranteed data integrity. Better visibility for management, auditors and regulators into the processes and supporting calculations—the story behind every adjusting entry. Allowing finance teams to spend less time inputting data and more time analyzing, modeling and focusing on strategic, decision-driving roles. The net result? More productive teams, more accurate numbers and, ultimately, a better bottom line—all from picking the right account reconciliation software. Full-spectrum FP&A options streamline account reconciliation, empower finance teams and give leadership the tools and confidence to make the right decisions—not just in finance but across the organization. Did you learn a lot about account reconciliation in this post? Here are three more to read next: How to Overcome the Barriers to Automated Account Reconciliations This is Why There’s No Such Thing as ‘Good Enough’ Account Reconciliation Why Businesses Need To Focus on Higher Revenue per Employee

What does your month-end financial closing process look like? Do you have a system in place or do you “wing it” and hope for the best? Are you searching for a better way of doing things next month? Never underestimate the significance of monthly closing and the importance of a month-close checklist.  Keeping track of what happened in the previous month can help position your company for future success. Month-end closing ensures that you have information about your company's financial situation and are ready to report on those figures. It is critical when making short-term decisions and helps your teams work towards your organization's long-term goals.  Plus, accurate monthly reporting makes year-end closing much easier to understand. The month-end closing process is critical to any business but can be very time-consuming. Creating the right month-end close checklist allows your team to break out of reporting silos and to focus on more strategic business locations.  💡Key Takeaways:      Your month-end close process should include recording incoming cash, checking your AR records and reconciling all accounts, including petty cash.  Track all your business transactions, ensure accurate records and mitigate fraud risks. Remain up to date on the financial well-being of your organization.  Your month-end close checklist should include categories, task descriptions, task prioritization, names of the preparers and the reviewers, and offer a full review of financial statements. The benefits of a month-end close checklist are error reduction, improved reporting results, increased efficiency and preparing your company to be audit-ready. Common mistakes companies make during their month-end close process are duplicate data entry, unstandardized processes, delays in information and lack of automation.  What is the Month-End Close Process? The month-end close involves your finance and accounting teams collecting, reviewing and reconciling the previous month's transactions and financial activity.  It provides compliance and financial accuracy while preserving your data's integrity for analysis planning. Spending and trading activity are somewhat predictable, but each month can introduce new issues that you and your teams need to consider.  That's why we emphasize a solid flow in closing each month, from when the team begins gathering information to crossing the finish line with the final financial report.  This month-end close checklist outlines not only the transactions, but also the growth of the company for each period. Keep in mind that every basic task has many sub-steps. Also, the timelines depend on the specific situation of your company. This process involves several steps your team will complete over several days. What Are The Key Steps In The Month-End Close Process? 1. Prep Work Email supply about unpaid invoices. Contact your sales representative to ensure no revenue loss and that your sales pipeline metrics are correct. Ensure all manual entries are accurate (but don't worry about checking automatic posts at this early stage.) 2. Reconcile Cash Check and reconcile cash. If the cash is in transit, note its destination and relationships. We recommend double-checking all payment accounts to ensure everything is organized (including petty cash) and properly pooled. Review Account Operations: Double-check and adjust accounts payable (AP) and accounts receivable (AR). 3. Accrual Estimates Review all month-end accruals and track coverage for the next month. Accounts for prepaid expenses such as income. 4. Preliminary and ASC 606 Reviews Review all manual and automated data flows related to revenue recognition and commissions. Test for validity and conduct preliminary walkthroughs with your team to ensure the information makes sense and is consistent across reports. 5. Conduct Flux Analysis and Adjust We denote this as "flexing your financials." Review and double-check monthly and quarterly month-end closing results to see how the report compares to the company's growth goals and expectations. If something looks abnormal and needs tweaking, it may grow over the years. ‍ 6. Wrap Up and Deliver Treat these reports as if they are already for issuing. Double-check your reports once more and then deliver them to the executive teams for reviewing and analysis. Why Is The Month-End Close Process Important? The month-end close lets your teams track all your monthly business transactions. It is essential to ensure that your accounting data is as accurate and complete as possible. Accurate monthly data feeds several other accounting procedures. For instance, having an accurate monthly report makes year-end closing much more straightforward. End-of-month closing benefits include: Create accurate and up-to-date financial records. Organize annual financial statements and save time filing tax returns. Month-close reporting simplifies the process, making it easier to audit. The financial close process identifies areas that need improvement. Along with that, you can make more informed decisions based on your company's financial activities. It positions your executive team to make cash allocations that benefit each department of the company. The Ultimate Month-End Close Checklist: 1. Record Incoming Cash Incoming cash comes in many forms, such as invoice payments, revenue and loans. Record all funds that your company received during the month. This is also a good time to do the following: Review outstanding deposits Verify that all invoices have been sent Count cash on hand Manually recording incoming cash and taking these other steps can be time consuming and stressful. It’s best to use a software application that automates these tasks. This makes for a more efficient and more accurate month-end closing process.  2. Review Accounts Payable Depending on the size of your company and the number of monthly transactions, you may find it difficult—if not impossible—to record transactions as they come to you. But that’s no excuse for mistakes. You still need a system for organizing and maintaining accurate records.  A review of accounts payable records should include, but is not always limited to: Gathering all necessary records Determining if there are any accounts payable that have been paid  Checking your records against accounts payable to know what has and has not been addressed  It’s easy to put this step off until the end of the month, but it’s also a costly mistake. Automation software can help you better track accounts payable throughout the month so that there’s less pressure on you as the fiscal calendar turns. 3. Reconcile Accounts Don’t fall into the trap of assuming that you (or anyone else) didn’t make any mistakes during the month. Even the most experienced and knowledgeable financial professionals slip up now and again. This is why it’s so important to reconcile all of your accounts. In short, this is the process of comparing your records to account statements, such as from your financial institution. If the numbers match, you’re in good shape. But if they don’t, you have some work to do. It’s time to dig deeper to pinpoint the reason for the difference, you can use this bank reconciliation template to help. Make the process by putting all your accounts into one of these three categories: Bank accounts (checking and savings) Bank loans or leases (such as for equipment or real estate) Accrued or prepaid accounts It’s generally best to start with bank accounts, but it’s most important to implement a reconciliation system that works for you.  Note: If you neglect to reconcile accounts, a simple mistake this month can grow into a bigger problem next month.  4. Review Fixed Assets Think of fixed assets as items that add value to your company. Examples include work vehicles, office equipment and real estate (buildings and undeveloped land). Intangible assets also fit into this category, including things such as trademarks, patents, domain names and brand names. Fixed assets are long-term items that don’t easily convert to cash. Instead, many of these assets generate monthly expenses in the form of depreciation, repairs or amortization. For example, machinery—such as for manufacturing products—is imperative to the success of your business. It’s also valuable. However, over time, you can expect this machinery to depreciate.  During your month-end closing process, record any expenses associated with fixed assets. 5. Review All Financial Statements This may be the last thing you do, but it requires your attention nonetheless. Start by reviewing these financial statements: General ledger Profit and loss statement Balance sheet Income statement Cash flow statement A thorough review allows you to feel confident in your month-end close. It also sets you up for success the next month.  If you find any errors or areas of concern—such as overspending within a specific department—address them right away. 4 Benefits Of a Month-End Close Checklist Understanding why month-end close processes are vital to business is the first step in preparing a checklist. Before we discuss the common errors people make with their month-end closing process, let's review the benefits of having a month-end close checklist for closing out the month. 1. Reduces Accounting Mistakes  Accounting reports contain a large amount of data and are subject to duplicate entries, omissions and other errors. These errors may be legitimate or an attempt to cover up fraud or theft. A month-end checklist helps accountants remember what they might otherwise skip. 2. Improves Results From Accurate Reporting   Accurate reporting allows top management to identify and correct performance problems. In addition, creditors, investors and analysts can assess the company's overall performance and financial condition.  By implementing the checklist, the accounting department can produce accurate financial statements on which all stakeholders can rely. A month-end closing checklist helps eliminate errors and omissions and helps ensure that critical balances, such as cash and inventory, are accurate each month.  3. Increases Efficiency Among Your Teams  Report generation takes a long time due to large amounts of data. However, delays in issuing financial statements may delay management's awareness of significant performance and liquidity issues that need addressing sooner. End-of-month checklists reduce the time it takes to organize and submit internal financial reports. A well-thought-out to-do list keeps accountants and management on the same page when it comes to receiving financial reports.  4. Prepares Your Company for an Audit  In addition to your company's audit readiness at the end of the month, a checklist also helps you prepare your annual financial statements. Implementing a month-end closing checklist increases efficiency and accuracy, reducing the time, effort and expense involved in preparing for year-end audits. Common Month-End Close Mistakes - And How To Avoid Them 1. Duplicate Data Entry  One of the challenges we face in completing month-end closing tasks is that manually entering data is time consuming. While you may have multiple systems in place to help run your business, it is more likely that they will ultimately run independently.  The team must manually upload data to the accounting system for the accounting department to process month-end goals. Unfortunately, this process is time consuming and error prone, so finding an automated solution is essential. Even after entering data into the system, your accounting team still needs to ensure the information is accurate across all platforms. Ultimately, this manual process exhausts resources. When teams manually enter data into the system, there is a high risk of mistakes. Finding a system that can automatically transfer data from one system to another is a great way to smooth out the month-end closing process. Even small mistakes in financial statements can lead to big problems when the information rolls into planning. Also, if there is an error in the data, using the manual process will take a lot of time and effort to find the cause and fix it. This necessary time delays the release of monthly financial statements as your accounting team must spend time reviewing completed work. 2. Unstandardized Processes  A month-end closing process should generally include the same steps each month. However, manually integrating data from different departments can present new challenges each time. Standardizing processes ensures accurate and consistent results month after month. Standardized processes help meet month-end closing goals, even when your accounting team is understaffed. On the other hand, without a systematic way to balance the books, you may encourage employees to look for shortcuts to their responsibilities.  These workarounds increase the likelihood of errors in your financial data, which can cause problems in the future and take hours to document a reproducible procedure each month. Create checklists of tasks and activities ordered by date.  Simplify your chart of accounts. Also, review journal entries to determine whether you have taken materiality (significance) into account. If possible, increase the dollar limit for certain transactions to avoid pointless recording.   3. Late Financial Data  Another challenge you may face is the speed of producing monthly financial reports. In other words, how long does your accounting department need to prepare statements after the end of the month?  If the process takes too long, you need a method for improving the efficiency of the month-end closing process. Not having access to information when needed makes it difficult to make decisions and plan for the future. It is challenging to manage a business without readily available financial statements. Without the right tools, your organization's processes will become less effective and you will lose insight. Find out why data from a particular source experience frequent delays. Other departments and providers may not understand the need for timely information.  Employees may need certain types of training or refresher. Another option is to reconcile important accounts more frequently. Doing so reduces your reliance on last-minute records from external accounting.  4. Understaffed Accounting Teams  While you may lack the resources to hire more staff, training some employees for crucial steps in the closing process may be a viable option. As long as an experienced financial professional or manager takes responsibility for month-end closing, this alternative can work for your business. You will also need to evaluate fraud concerns. Mutual staff training can also provide separation of duties and improve a company's internal control environment. 5. Lack of Automation  Automation is significant in today's business world. Don't rely on spreadsheets and manual processes that don't allow for timely revisions and corrections to your accounting system. Identify tech-savvy associates who can explore executive data needs and current software reporting capabilities. Ask a consultant or cloud coach to advise you on your current processes and the potential for step-by-step automation. Is That All You Need To Do? The steps in our guide to the best month-end close are a good start to any month-end close process checklist, but there may be other steps to add. Consider the following: Review revenue and expense accounts Count inventory Review petty cash The more times you go through the month-end close process, the better you’ll understand what steps to take and how to work more efficiently in the future.  Conclusion Are you confident in your ability to take these five steps? Do you believe they’ll improve your month-end close process? Once you create a month-end close process checklist in Excel, you can use our financial close management software to automate tasks to save time, reduce stress and maintain accuracy.  Don’t ignore month-end close best practices any longer. A few simple steps can have a profound and positive impact on your business. 

Business continuity planning aims to prevent disruptions and respond to business interruptions or disasters effectively and efficiently. As such, it typically ensures the safety of employees, customers, contractors and visitors and minimizes the impact of these disruptions.  We recommend doing this by accelerating recovery efforts, and safeguarding the company's operations, reputation and stakeholder relationships.  "Plans are only useful as evidence that planning took place." U.S. military service members often use this quote when discussing "the plan" any mission, tactical plan or even military business administration decisions. That cadence is partially true with business continuity plans (BCPs). A BCP should remain flexible enough to respond to changing circumstances. Organizations should also design them to address the loss of people, work, equipment, IT services and suppliers (or other third parties). Additionally, a business continuity plan should outline how your teams can implement the recovery strategy. 💡Key Takeaways: Threats to business continuity—and the reason you need a business continuity plan—include global crises, natural disasters, utility outages and cybersecurity. There are varying types of business continuity planning, each with its own purpose within your organization’s overall business resilience.  Not having a plan for an emergency can lead to financial loss, loss of consumers (and team members), loss of confidence and brand reputation damage. Creating a business continuity plan is paramount to running a resilient and agile business. Finance teams need to know efficient and agile planning strategies while fostering transparency for effective business continuity planning in finance.   Source: YouTube Threats to Business Continuity We recommend designing a plan for all potential outcomes. Common business disruptors to look out for are as follows: Global Crisis In 2020, we all learned the necessity of a business continuity plan when responding to the COVID-19 pandemic. Employees  were required  to work from home while many employers  were unprepared for a remote workforce.  IT infrastructures were unable to manage people working outside of the office.  Equipment and supplies were scarce. The situation only got worse as shutdowns persisted.  As concerns with the global pandemic began to ease, worldwide inflation, a war in Ukraine and other economic insecurities continued to impact businesses.  Your organizations must be prepared for global crises and this is where a continuity plan comes in. Natural Disasters and Utility Outages Natural disasters refer to anything related to weather, such as hurricanes, tornadoes, tsunamis or other natural phenomena, including:  Wildfires  Earthquakes  Volcanic Eruptions Meteor Strike These catastrophes are tricky to predict and occur in a matter of moments.  They can cause severe damage to structures and disrupt supply chains in affected areas. Natural disasters can also cause utility outages, such as power, water and communication lines. Cybersecurity Cyberattacks include ransomware attacks, SQL injections, data theft and distributed denial of service (DDoS) attacks. At best, until the issue gets fixed, the IT infrastructure may function. At worst, without a backup, all your business’s data can become inaccessible.  Types of Continuity Planning Business continuity planning concentrates on the implementation, management and maintenance of systems designed to protect against disruptions and restore services, resources and activities necessary to maintain critical business functions.    Source: The Hustle Story   Effective recovery strategies can resemble a set of business continuity plans departmental team leads execute in order of priority and revise regularly. There are four major types of continuity plans: 1. Crisis Management Plans Many refer to a contingency plan as an "incident management plan." This provides a structured response to incidents that can lead to devastating consequences for the company if poorly managed. Crisis management plans tell an organization what to do in a disruption. 2. Crisis Communications and Emergency Response Plans Design your crisis communication plan to complement crisis management activities by coordinating with communications stakeholders. Executive management prepares the emergency response plan for the worksite and focuses on ensuring a safe working environment and protecting and sustaining life. Business continuity plans may contain different sets of steps for various threats. 3. IT Disaster Recovery An IT disaster recovery plan focuses on recovering IT systems, telecommunication and data assets. It focuses solely on the IT infrastructure and ways to recover data and get the organization’s tech stack operating again after a catastrophe.  4. Business Recovery A business recovery plan (often the heart of a business continuity plan) focuses on the continuation and restoration of business resources and activities supporting the delivery of goods and services. These often involve manual workarounds, procedures and alternative methods for managing the loss of equipment, personnel, technology and suppliers.  Benefits of Business Continuity Planning A business continuity plan is essential for any business as disruptions are often expensive. We're talking about everything, including DDoS attacks, which temporarily bring down websites, warehouse fires causing loss of products and disruptions in the supply chain. Not having a plan for an emergency may lead to loss of customer (and employee) confidence, financial losses and damage to an organization’s reputation.  Here are some key benefits of continuity planning:  Quickly recovers operations after a disruption Keeps your business operating during and after a disaster Reduces costs and length of any interruptions Reduces financial risks and exposure Safeguards the company's reputation Builds considerable customer trust and confidence Develops confidence within the organization Insures against otherwise unforeseen and unacceptable risks Complies with legal or regulatory requirements Saves lives during hazardous events, such as fire Business Continuity Framework A business continuity plan is paramount to managing a resilient and agile business. Your business continuity team and other employees need to understand the significance of a continuity framework. Here’s how this framework helps your teams: Identify the goals and objectives of the plan Establish an emergency preparedness team Perform a risk assessment and business impact analysis (BIA) Identify essential e-commerce business functions Prepare a plan for each essential function or service Review and make sure every business function has been addressed Train staff, test, revise and update the plan Source: BusinessTechWeekly.com What Finance Teams Need To Know About Business Continuity Planning It’s no secret that the world is still navigating uncertainty today. 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, 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 this 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 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 realigning capital investments and taking on some debt. Alternatively, it can also include 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 how to keep their companies in the black better than anyone. Efficient and Agile Planning Finance pros cannot plan effectively without clear and up-to-date insights into long-term business implications. That is why rolling forecasts are so essential 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.  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.  Stay nimble with rolling forecasts. Get started with Vena Rolling Forecast Software. That level of foresight enables leaders to confidently chart the best path forward through uncertain times. It also helps them sleep soundly, knowing they based their decisions on reliable, actionable data.   Perhaps even more essential during times of uncertainty? Fast and efficient integrated planning. And this means aligning every business function toward the same strategic goal.  After all, organizations cannot expect finance leaders 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.  Discover everything you need to know about financial planning and analysis in this guide. 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.   Did you learn a lot about business continuity planning in this post? Here are three more to read next: Why are Dashboards Important to Performance? How Vena’s New Modeler Makes What-If Analysis Even Easier The Top 3 Things You Need To Know To Plan for Today and Tomorrow

In our data-driven world, 33% of finance teams are struggling with inaccessible or siloed data.  Companies cannot back well-informed business decisions without accurate reporting from FP&A teams.  Siloed data makes it difficult for finance teams to gather all the information needed for creating accurate reports. Inaccurate reports are just one-way data silos negatively impact business.  In this blog, we're going to cover why exactly data silos are problematic for your organization and how to identify them and find a solution to avoid them. But first, let's discuss what a data silo is. 💡Key Takeaways:  Data silos occur when business information gets stuck somewhere within a network, which is less useful. They create barriers to data collection and reporting. Data silos cause a decrease in efficacy in the collection, storage and management of business information by creating incomplete data sets. It also leads to inaccurate and inconsistent data, causes duplicate information systems and increases your organization's IT infrastructure costs.  It cultivates a siloed mentality between departments making it difficult for various teams to share data or communicate effectively. Most companies experience data silos, and the key to avoiding them is identifying them so that you and your teams can determine a resolution. What Are Data Silos?  Data silos are when useful company data gets trapped within an organization's information network. This data becomes less valuable than it could be otherwise. While these barriers to information may seem innocuous, siloed data makes sharing and collaboration across departments challenging. Video: YouTube Since this data is unavailable to the entire organization, teams, departments and even individual team members get only part of the information. It creates issues for the organization and its customers.  Data silos occur when different departments collect data in their internal systems, leaving information out of a central repository where other departments and team members can access it. Why Are Data Silos Problematic?   Data silos are a problem because they hinder business operations and decrease the efficacy of collected data. They restrict executives from useful information for vital business decision-making.  Siloed information prevents sales reps, call center agents, support professionals and operational teams from accessing pertinent data about products, customers, supplies and more. The following are specific ways data silos are harmful to a company: Creates Incomplete Data Sets      Finance professionals spend roughly 25% of their time on data analysis. Data silos create incomplete data sets, meaning budgeting and forecasting reports do not paint a clear and complete picture. They can impact business internally and can be detrimental to the customer experience.  For example, if a customer contacts support for help with a malfunctioning product and the support agent can't see data from other customer interactions such as sales or billing, support could be missing vital information to assist the customer.  Let's say a customer often speaks to the billing department to pay their bill because they are not comfortable with technology." If support knows that about the customer before taking the service call, they can make a better plan to work with them to resolve their current issue. Incomplete data sets slow down the resolution process, make it difficult to serve customers and create challenges for department heads to gather information, such asFP&A professionals who need to develop monthly, quarterly or annual reports.  Leads to Inaccurate and Inconsistent Data     Incomplete data sets often lead to inaccurate and inconsistent data. Inconsistency occurs between departments creating further data inaccuracies.  For example, if marketing teams format customer information differently than other departments, data errors by other departments (such as sales) are more challenging to identify and fix. Updates to the data in other systems do not get made in a siloed customer service data update. These information inconsistencies create data integrity and quality issues that impact end users in analytics and operations applications.                                                                                                    Source: RkimBall   Causes Duplicate Data Platforms        Data silos occur because there are multiple data systems within your organization. CMSs, CRMs, ERPs and other data platforms create siloed information unless they are integrated. Still, even well-integrated systems can create siloed data.  Siloed data adds to IT costs by increasing the cloud space needed and the number of on-prem servers your organization must maintain.  Often, separate departments deploy and manage their systems instead of the company's data management team, increasing inadequate use of IT resources and unnecessary spending.  Doesn't Support Collaboration     When data gets isolated in silos, it reduces the opportunities for information sharing and collaboration between departments and throughout the organization. It is more difficult for teams to work together effectively when individuals do not have access or visibility into siloed data. Cultivates Siloed Mentalities Between Departments   Siloed data contributes to inter-departmental silos. Departments that safeguard their data closely and are unwilling to share it with other divisions create silos. It almost becomes part of their mentality.  They often oppose data governance programs aimed at breaking down data silos and ensuring data consistency and accuracy across all organizational systems. Data Security and Regulatory Issues When individuals store information on Excel spreadsheets or an online business tool such as Google Drive, they often do so on mobile devices in files that are not shared. Not only does this create data silos, but it also creates data security and regulatory issues. It increases risks to an organization's data security and privacy without suitable controls. Siloed data also complicates measures to comply with data protection and privacy laws. How To Identify Data Silos  Data silos are all too common but can be difficult to identify, especially in larger companies with various business units operating autonomously. While data silos may not be evident, here are a few signs that point to them: Teams can't access or find relevant data. Various departments report inconsistent information. Executives complain about a lack of information for making well-informed business decisions. End users discover data sets are out of date or incomplete. Unforeseen IT costs unexpectedly emerge. Breaking Down Data Silos With Vena  Eliminating data silos enables organizations to collect, store, manage and use data more effectively. It also frequently lowers data management and technology costs. Vena removes silos and connects data assets in one Complete Planning platform to support your business operations better.