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Make continuous financial forecasting a success factor of your company

Anyone working with financial and business planning knows that one of the key requirements for business success is data. If the numbers are not right, the business is not right. Some industry experts say that when reporting figures, 20% of the figures should focus on the current situation and a staggering 80% should focus on the future. To be able to forecast the future, it’s not enough to make the calculations only once a year.

In the modern world things change weekly – even daily – so the best before date of a budget made once a year comes forward very quickly.

Continuous forecasting makes financial planning more flexible, predictable, and real-time. That’s why companies should embrace digital financial management systems that make continuous forecasting easier and more accurate. The tools of modern financial planning are not just nice additions to a business; with them a company can make financial forecasting one of its success factors.

Financial planning – from electronic to digital

In the past decades huge leaps have been made in financial planning. First, there was a shift from paper-based financial planning to electronic planning.  It allowed data to be entered into the system only once, and all manual processes to be automated. We are now living in an era of digital financial planning: the corporate database is not gathering dust in archives or on hard drives, but mostly in the cloud. This information and the key performance indicators can always be checked in real-time, making decision-making easier and allowing the company’s activities and priorities to be changed more quickly.

Digitalization has increased the role of financial planning in strategic planning. The time that was previously used to collect data can now be used to analyse data and to develop business. Ensuring that business problems are identified and resolved in a timely manner, and that the business does not miss on promising possibilities. The key question is no longer how our business can benefit from digital systems for financial planning, but what will our business lose if it is left behind by digital developments?

The time for static calculations is over – business budgeting and forecasting on a continuous basis

Is budgeting only made once a year in your company? Is it mainly a forecast of future turnover? This shouldn’t – and needn’t – to be. The financial budget should not be a hastily prepared spreadsheet in Excel that is done once a year. In many companies the budget is seen as this: a static document that is not updated and it’s forecasts are not specified during the year.

What should budgeting be then? Forecasting and budgeting should go hand in hand in the center of financial planning. The budget should be an active action plan, refined by continuous financial forecasting. Rolling forecast is a method where forecasts are continuously updated regardless of the financial year or calendar month. Rolling forecast adds flexibility to the figures and transparency to the business. This will guide and help you plan the business activities. The data is up to date, transparent and easily accessible to everyone. Constantly updating your budget and forecast may sound like a chore, but it’s worth it: better forecast accuracy has an impact on profit, profitability, and cash flow.

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Accurate business planning with modern business planning systems

As in many other sectors of life, human error in manual calculations and reporting is often significant. Digital solutions for financial planning reduce manual work and increase its quality. They guarantee the reliability of the figures; for example, the management team and the board only receive accurate numbers to support their decision making. When business is presented in numbers exactly as it is, decision-making is well-informed, and planning for the future is more secure. In addition, digital financial planning eliminates the need to search, compile, and organize information: all information is displayed in real-time in a single location, for instance in the cloud, which is flexible depending on the needs of the company and its users.

Clausion’s solution for financial planning is made to work as the center of the whole financial department. It is adaptable to different business planning and budgeting needs, regardless of the industry. It makes rolling forecasting easy. All the data is gathered to our cloud service. Here the data looks the same to each user. The data is always up to date and reliable: it supports decision-making 365 days a year. Also our system speaks the same language as you. It’s very easy to use and intuitive. Our customers have been very satisfied in how easy it is to start using the system and to implement it throughout the organisation. Our consultants will help you customize the solution to meet your business needs and ensure that your staff gets the most out of it.

Curious to know how Clausion could help your company with financial planning?