inlumi blog

There isn’t a one-size-fits-all approach to budgeting or forecasting. Some organisations keep it relatively high-level using a subset of accounts, while others conduct planning at the same levels of actuals. There is one common denominator, however: speed.

You may or may not be familiar with the “catch 22” idiom. It is where one is trapped between two contradictory conditions, a somewhat inescapable paradox. It is a situation that I frequently come across when discussing the benefit of an Enterprise Performance Management (EPM) solution. Organisations are in desperate need of a tool that streamlines their FP&A processes, but the team involved shudders at the thought of implementing a solution.

It is a reality that employee-related costs comprise a significant percentage of an organisation’s operational costs. Typically, a Workforce planning solution caters to the traditional finance cycle of the annual budget and the year-to-go periods of the quarterly forecasting. If an organisation wanted to perform long-term planning of Workforce costs, this was done at a cost centre level with a subset of accounts. The COVID pandemic triggered an emphasis on the costs, with organisations quickly looking for ways to gain further insight into them. A critical aspect in the decision-making is truly understanding where these costs are.

When I ask organisations how frequently they perform a forecast, the response is almost universally the same: every quarter with an annual budget. Mid- to long-term planning was often done manually in Excel even if an Enterprise Performance Management (EPM) solution was in place. The focus was on the short term with special attention to the budget.

As a Financial Controller, you might love Excel. But simply using spreadsheets for the creation of your budget or forecast has significant consequences.