Financial Planning is a process of thinking. One of the end results from this process is a product called a budget. A budget is a product that expresses thoughts. As a product a budget must be created and its creation must have a foundation. The foundation for creating a budget is answers to three basic questions.

Among the difficult subjects for FP&A and management, there is the very “sensitive” relation between budget or forecast and managers compensation scheme. 

When preparing the implementation of a planning and forecasting system I am often asked if we can just take the existing spreadsheet solution and squeeze this into the new system. Invariably my answer is: Yes, we can do this, but we should not. Why?

Financial Planning is seen as a service however seeing Financial Planning as such limits its value-added capabilities. Financial Planning creates products that help people maximize wealth. There are two products created from Financial Planning for this task.

Traditional budgeting has for a long time been criticized for encouraging counterproductive behaviour, hindering growth and wasting time on useless exercises. In recent years, the Beyond Budgeting methodology has gained ground as an alternative.

Statistical approaches to forecasting can provide a framework for creating rolling budgets to which analytical skills and judgment can be applied in supporting a sound budgeting process.