November 16, 2021
If you look back at the technological leaps and bounds that have happened over the last thirty years, it’s hard to believe we’ve actually done it. Generally, we’ve taken so many things online. We’ve all got tiny supercomputers in our pockets, and distance, largely, means nothing.
But even with so many technological advances, there are still things that we haven’t quite managed to automate and digitize yet. Some, like picking grapes, are because of physical constraints. Others, like financial planning and analysis, is because we haven’t figured out how to equip machines with the required insight. Yet.
However, as we move more and more things online, and there’s more demand to close the books faster, FP&A automation is high on the tech agenda. Here’s what you need to know.
Anyone who works in finance and accounting knows that manual month-end reporting is one of the most stressful things you can do. Every month, you need to balance your day to day tasks and processes with the need to get everything wrapped up and reported.
Management is breathing down your neck, waiting for the numbers. You have to double and triple-check everything to make sure it’s just so, and there’s always at least one critical piece of information that’s missing. You’d like to close the books faster, but you can’t sacrifice speed for accuracy. So, you’re stuck with late nights in the office, chasing down information and endlessly checking everything with a fine-toothed comb.
Of course, you can’t really complain about the processes that support FP&A. Without that crucial month-end reporting, you won’t know where you stand financially right now, and what you need to do to stay on track and grow according to your business plans.
Accurate, up to date financial data is crucial to the success of your company, so while management might push you to close the books faster and deliver your reports earlier, they also don’t want you to compromise on accuracy. It’s a rock and a hard place, and you get to do it every month.
There are some FP&A tasks that your usual accounting software just can’t do. But that doesn’t mean you can’t use that information in other ways. The key lies in integration and automation.
As digital technologies become more sophisticated and intelligent, there are tech companies using AI and machine learning to create software that can think. Those solutions might be some way off, but there’s no reason you can’t use the data you already have, simply by choosing the right tools.
APIs and integrations between various tools and technologies make it possible to pass information between the various kinds of software you use. Some even allow you to use your own custom spreadsheets to calculate and project using data from other programs – and to send information to those programs when you’re done.
These integrations and the automation possibilities they create make it quicker and easier to take month-end financial data and use it to great up to date FP&A reports and proposals. Since time is money, that means you can make the right decisions faster, and that’s always better for the bottom line.
While we might not have reached the point where machines are ready to make complex business planning decisions (at least, not on their own), we are rapidly moving towards that possibility.
New accounting technologies allow us to record transactions much faster, so we’re getting closer to managing financial matters in real-time.
Cloud-based technologies are allowing teams in different cities or even different countries to update information as it happens.
This means that finalizing the financial month-end is becoming easier too. Instead of waiting for information to arrive, it’s a matter of confirming that the information that has been entered is correct. This means we’re already able to deliver a faster, and often more accurate, month-end process.
Just knowing what your month-end financial snapshot looks like is not enough for FP&A though. You still need to use that data to plan for whatever comes next.
We might never get to the point where complex financial decisions are made entirely without human input. Nor, perhaps, should we. However new tools that integrate, automate, and allow for rapid information sharing across multiple platforms can get us to a place where we can make the right decisions that much faster.