For many of us finance and business professionals, looking across all the fascinating areas of financial resource management, there is one common challenge that jumps out:
The disconnects between how functional teams think, talk and operate often cause the original business intent behind an allocated financial resource to be lost or diminished in the feedback loop.
So, what does this challenge look like in real life? For anyone who has managed a budget as a product lead, a marketer, or a finance business partner at a corporation, chances are they have experienced some flavor of the following scenarios:
Visions, strategies, plans were passionately debated at annual planning meetings and budget allocation decisions were made accordingly. Then budgets get funded. Everyone’s pumped. A couple of months later, budget owners and their finance partners are sitting in multiple meetings a week, scratching their heads over a set of conflicting spreadsheets maintained by different teams, trying to answer some much less exciting questions like:
“How much money do we have left for this marketing campaign?”
“Which items should we sum up from each team’s budget to see the overall available budget for project ABC?”
“What % of this bucket of money has been committed with vendors?”
By the time a reconciliation is finally reached on that snapshot, a series of new purchase orders have been opened, a few previously opened ones got delayed, and everyone finds themselves trying to catch up to the new snapshot... Budget managers get increasingly stressed out as quarter-end nears, fearing they’d lose budget and look incompetent due to underspending or under-executing. The finance team is equally stressed out, for a large variance between actual spend vs budget could pose serious challenges to meeting internal Opex and profitability targets.
At the end of the quarter, an executive business owner, eager to see how her org is tracking towards delivering against the business goals set at planning, asks the fair and simple question:
“How much money have we put into action for business goal XYZ and how are the initial results looking?”
The finance team pulls a report from the system that shows $$ spent by GL (general ledger) and by cost center, maybe by region as well, all nice and neat with graphics and YoY and QoQ comparisons. But nothing about this “finance view” jives with how the executive thinks about the world (resource allocated and impact achieved by key results, channels, demographics, etc). In the following days, a series of meetings take place between her business managers and the finance folks, where excruciatingly painful manual work is conducted to “map the finance numbers to business activities”.
By the time the executive gets the analysis, which is still prone to inaccuracies because it’s the product of a scramble, manual sprint, her priorities often have moved on -- the window of using this critical piece of information to drive insights and correct course may have already passed.
These are just two typical examples picked from a plethora of problems caused by outdated financial resource management & reporting processes. Because of its highly distributed nature (small, repeating inefficiencies that occur at the most nuanced points of business execution), these problems are more inconspicuous and hence more difficult to address.
Thankfully, we live in a time where automation and collaborative systems are no longer a technical bottleneck, but more of a mindset shift and an implementation effort. Cloud-based solutions allow everyone to work off of a single source of truth that updates real-time and enables an unlimited number of ways to view data by attributes and metrics critical to different stakeholders.
We’ve seen entire enterprise functions, such as sales management, software development, and supply chain management, being revolutionized and becoming order-of-magnitude more efficient thanks to these new tools and the mindset and behavior shifts they enabled.
It is now time for enterprise financial resource management to go through this fundamental upgrade, starting with implementing a cloud-based, fully synchronized system that connects all functional teams involved in the allocation, execution, reporting, and analytics of financial expenditures through a single platform with maximum flexibility and collaborative features.
Doublefin is on a mission to bring automated & collaborative resource planning to every business. Request a demo and see Doublefin in action today!