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Traditional Budgeting

Dynamic FP&A: The Role of Planning

by Michael Coveney, co-author of "Budgeting, Planning, and Forecasting in Uncertain Times"

We live in an unpredictable world where the future is uncertain. If it was then we would all make a fortune by making strategic ‘bets’ on certain outcomes – we would know what products and services to back, what level of stock and staffing to have, and when and where to market our capabilities for maximum effect.

But the world is not like that. When we use the word ‘unpredictable’ or ‘volatile’, what we are really saying is that the mechanisms we use for predicting the future are inaccurate. Things happen that we either didn’t foresee, or that impacted differently from what we expected. Most of these ‘things’ are typically external and beyond our control. For example, a competitor changing their price, a company introducing a disruptive technology, the impact of natural events such as the weather, a change in government policy, a significant change in the local economy, or a combination of any of these. However, senior executives are expected to navigate their organizations through all of these challenges. They are charged with ensuring that limited resources are allocated to the right products and services for maximum return. That the organization is moving towards long-term strategic goals and to provide a reasoned explanation as to when, where and how it expects to get there.

Rolling Forecast: 7 Factors for Success

By Larysa Melnychuk, Managing Director at FP&A Trends group

The concept of a Rolling Forecast is a hot topic in FP&A at the moment. Many companies attempt to implement it, but not all of them are successful. Statistics suggest that one in five of the organisations that implemented rolling forecasts recently have since abandoned them, because they proved to be more complex than initially expected. Additionally, they didn’t find enough value in this tool to continue using it.

However, a Rolling Forecast can be a powerful tool for FP&A if used correctly..

Evolving FP&A: Should the Budget be Abandoned?

By Larysa Melnychuk, Managing Director at FP&A Trends group

In a rapidly changing business environment, the traditional, out-dated budgeting mentality is being challenged more and more. Target negotiations, political games and biased planning processes cost companies a lot of money. These conventional budgeting practices are non-value adding and need to be abandoned if organisations want to stay competitive in this dynamic business environment.

While the process of moving away from a traditional budgeting mentality is painful and slow, it is happening around the globe. The question is, are we ready to abandon the traditional budget completely?

Financial Planning & Analysis in Germany.

By Larysa Melnychuk, Managing Director at FP&A Trends group

FP&A goes by many names. In Germany, it is called “Controlling”.  From my previous visits to Germany, I knew that German Controllers are different from Accountants: they are forward-looking, analytical and often very technical in their approaches.

Recently, I got a great opportunity to learn how FP&A is evolving in Europe’s strongest economy.

I was invited to speak at the first FP&A/Controllers’ event in Hamburg that was organized by IMPLEXA . “It is going to be an unusual format”, Timo Wienefoet , the Managing Partner of IMPLEXA warned. “We will combine our FP&A discussion with wine tasting”....

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