Businesses are sitting on piles of data. Uncovering innovative ways to use it to drive growth is the job of financial planning and analysis teams.

Leaders across industries are realizing the value of FP&A, or financial planning and analysis. Future success requires using all the company’s data to make better-informed decisions while removing the manual tasks that rob teams of the time to focus on activities that deliver real business value.

The primary challenge for FP&A teams is data collection and aggregation. Finance pros spend a lot of time gathering and processing information, in part because many don't have direct access to data in key source systems. They’re still drowning in a tsunami of Excel spreadsheets, making analysis error-prone, slow, and siloed.

As a result, senior executives and board members who should draw strategic guidance from FP&A data and insights don't trust the analysis enough to let it guide their decision-making.

FP&A tools are designed to automate the data collection process, speed analysis, and provide leaders with insightful financial and operational data — all in one place — so they can make data-led business decisions quickly and with more confidence.

Here are six areas your financial planning and analysis tools should support.

1. Budgeting and Forecasting

Forward-looking responsibilities of FP&A teams include planning the budget and forecasting the company's future financial performance. Budgeting requires parsing through past financial reports to determine how to allocate money for an upcoming period. Forecasting requires creating financial models that account for trends across the business, broader industry, and overall economy that may affect revenue and profit. Look for a financial planning tool that can collect all required data from applicable departments when creating a budget or forecast. Putting all this information in a centralized location eliminates the risk of data being missed while ensuring that decision-makers always have access to current, accurate numbers.

2. Scenario Planning and Modeling

Nobody knows what the future will bring, so you need to prepare for a variety of possibilities. One type of financial modeling is scenario planning, where the FP&A team maps out best, expected, and worst-case scenarios by plugging in different numbers for sales, order volume, and expenses to see how each would impact the company's financial position. Scenario planning helps you understand the potential impact of current decisions on the future. You can also test how various changes you’re considering would affect the company down the road.

3. Revenue and OpEx Planning

Revenue planning makes the difference between a financially healthy organization and one that’s burning cash by creating driver-based revenue and sales forecasts for all business units, in collaboration with finance, sales, and service teams. You can then continuously monitor actual performance against objectives and track the resulting impact on cash flows and balance sheets. OpEx planning allows you to budget for operating expenses in a detailed way. To be effective, a solution should automatically aggregate data so you can detect issues early, hit your quotas and deadlines, and execute with confidence.

4. Workforce Planning

For many organizations, payroll is the largest single expense. And now a tight labor market, rising inflation, and uncertainty about the global economy means workforce planning is even more important now. Workforce planning is the process of analyzing your labor use and using the data collected to forecast and strategize for current and future headcount needs. Workforce planning software makes it simple to plan compensation expenses by employee and job code and run reports, such as compensation, headcount, and variance analysis. Leaders can test drive various business assumptions and better plan by effectively managing one of their largest variable expenses.

5. Cash Flow Planning

Cash flow has taken on renewed importance in recent months, and a solution that provides data-derived cash use insights lets you control cash flows and optimize your operations. Look for the ability to pull data from existing systems into a centralized database. This unified source of information helps FP&A teams create actionable insights and reports for a collaborative, cross-functional planning process.

6. Management Reporting

The most important questions about a business often come to the CFO, and finance teams need the tools to respond with confidence. A good FP&A tool will automate manual processes and generate board reports, statements of cash flow, income statements, balance sheets, and CFO reports. The time you used to spend scrambling to find accurate information can now be devoted to strategy and analysis thanks to a powerful FP&A system.

FP&A in Action with NetSuite

FP&A teams that rely on spreadsheets to manage budgeting, forecasting, and reporting struggle to keep up with their growing list of responsibilities. This becomes untenable as the company grows. A planning and budgeting solution that pulls real-time data from source systems and keeps all this information in one accessible place makes FP&A professionals' jobs easier while increasing their value.

The less time an FP&A team spends searching for and aggregating data or sending emails, the more time it can spend analyzing and creating reports. The most effective FP&A teams are more likely to have automated reporting and data visualization tools. This results in faster planning cycles, more sophisticated modeling, more accurate forecasts, and better predictive planning that drives lasting success.

NetSuite Planning and Budgeting is integrated with NetSuite ERP, so it automatically pulls accurate, up-to-the-minute information from your core business management solution and eliminates the FP&A team's dependence on spreadsheets. Since all data is in one place and visible to everyone who needs it, there are no concerns about looking at outdated data or reports. This accessibility boosts collaboration and accountability, making it easier to get meaningful input and facilitating companywide and departmental planning.

NetSuite Planning and Budgeting enables organizations to accelerate budgeting and forecasting processes with market-leading predictive planning features, scenario planning and modeling capabilities, and management and board reporting, all in one collaborative, scalable solution.

To learn more, watch this product demo to see how NetSuite Planning and Budgeting enables users to quickly and easily produce budgets and forecasts, model what-if scenarios and generate reports — all within one collaborative, scalable solution.