Budgeting Planning & Forecasting

FP&A Done Right: Approaches to Long-Term Planning

November 14, 2022 by Lee Lazarow

“If you fail to plan, you are planning to fail.” – Ben Franklin

In our collective rush to react to ever-changing marketplace dynamics and shifts in the economy, it’s easy to focus on short-term plans, to the neglect of long-term planning. Today’s leaders need to have several plans – short-term, medium-term, and long-term.

Different plans for different needs

How do these plans differ? A short-term plan is designed to show granular details for a limited time frame. This is often updated monthly, although we have some clients updating their plans on a weekly basis. One of our clients follows a process where local managers update their plans on Mondays and Tuesdays, have the regional managers review the data on Thursdays, and allow senior management to analyze and assess the data on Fridays. Each Monday they start the process over.

Most organizations utilize a medium-term plan that looks out anywhere from a few quarters to a full year. Most people will think of this as a standard monthly forecast with data at a bit more of a higher level, but still somewhat details.

A long-term plan often goes out multiple years. Many companies create a 5-year plan, although some industries such as entertainment and pharmaceutical often create 20-25 year plans. A long-term plan is a high-level view of the business. It’s not nearly as granular as short, or even medium-term plans. The plan does not get down to the level of looking at a GL account or a customer. It’s a measuring tool and a defined way of reviewing the progress of the company. In short, long-term planning helps to set the company’s direction.

The essentials of long-term planning

The long-term plan gives you guidance on how to answer several questions, including:

How can we expand the company?
How can we look into acquisitions?
What products, geographies, and verticals can we or should we add?
What products no longer make sense?
How do debt payments impact cash flow?
What type of labor, buildings, locations, and equipment do we need?

A long-term plan can be considered a proactive approach to risk mitigation, enabling companies to plan, think ahead, prepare for, and lessen the impact of potential negative effects. At Revelwood, we recommend two approaches to long-term planning: the growth percent approach and a driver-based approach.

We often see both of these methods used when performing long-term planning in IBM Planning Analytics with Watson:

Growth percent approach

The growth percent approach allows you to adjust groups of data (accounts, departments, etc.) by increasing or decreasing the values from the previous year. Some clients prefer to simply use a single percentage (example: reduce all expenses by 2% each year for the next five years) whereas some clients prefer to include more variation (example: reduce utilities expenses by 2% next year, by 3% the following year, and by 4% for the next three years). But no matter what level of detail is used, Planning Analytics’ powerful scripting tool will perform the entire long term plan in a matter of seconds.

Driver-based approach

A driver-based approach uses operational activity to calculate key variable revenues and expenses. This approach allows you to simplify the input by defining a set of drivers and creating calculations that use the drivers. For example, a single driver of “units sold” can be used to immediately calculate revenue, COGS, and some of your variable expenses using the tool’s efficient calculation engine.

Mitigate risk with long-term planning

Long-term planning is your company’s assurance against planning to fail. There’s a reason why Franklin’s quote has lasted through the years. And it should be the motto of every planning team.

Learn more about long-term planning by watching our on-demand webinar – Long-Term Planning in IBM Planning Analytics.

This post originally appeared on IBM’s Journey to AI blog.

Modern Accounting: Does Your Accounting Team Have SMART Goals?

November 3, 2022 by Revelwood

This is a guest post from our partner BlackLine, explaining SMART goals and how they can help accounting managers.

One of the most widely used—and effective—approaches to goal setting is called SMART, which stands for Specific, Measurable, Attainable, Relevant, and Time-Bound. This helps you and your teams create clear goals with defined and attainable objectives.

Many accounting managers struggle with the annual goal-setting process. It can be hard to quantify the work of the folks who do the counting—which is ironic, but quite common outside of sales teams. Accountant routines can vary significantly and tend to be driven by outside factors.

But setting smart goals for accountants is a critical part of ensuring a successful year. They help you and your teams be intentional about what you want to focus on and accomplish and create alignment across the entire F&A organization.

How to Write SMART Goals for Accountants

Make Your Goals Specific

The more specific a goal is, the more attainable it will seem, and the more likely you’ll achieve it because you’ll know exactly what you need to accomplish in this area.

It’s okay to start with a larger goal, but then break it down into smaller goals that are more specific. Determine why this goal is important—for the individual, the team, and the broader F&A organization—and then talk about the short and long-term impact of achieving it.

To get even more specific, determine the exact outcome you want.

Make Your Goals Measurable & Attainable

Next, quantify your goals so you’ll know how to measure process and when they’ve been accomplished. This is often the most difficult part of setting SMART goals for accountants, and if a goal doesn’t seem quantifiable, try rephrasing it so it’s possible to measure.

It’s equally important to ensure the goal is attainable. Stretch goals are great, but impossible goals will only lead to overwhelm and frustration. Make sure the time frame is reasonable and identify anything that could get in the way of achieving the goal.

Removing those barriers should be the first step.

Make Your Goals Relevant & Time-Bound

Every goal must have importance to the broader organization as well as the individual. Uncover the why here, so the reason this is a priority is clear. This can also increase the individual or team’s motivation to achieve this goal.

Creating a reasonable deadline for each goal is also critical, along with regular check-ins to ensure you’re on track. It’s okay to have some flexibility in adjusting this deadline as needed, especially if things come up and get in the way.

This is, however, why it’s so important to identify and remove those barriers as the first steps toward the goal.

Strategies for Effective Goal Setting

Here are three strategies to incorporate into your goal-setting process that will make your accounting and finance teams far more effective in the future.

Take a Project-Based Approach

Most of us have down time here and there that we could utilize to work on a project. Talk to each of your team members about coming up with a project that contributes to their own development, helps them connect with others, and causes them to look at their job in a new way.

For example, a Senior Staff Accountant could conduct a skills training to help accountants keep up with changes in the industry. Or, maybe you believe your AR team could be more efficient but you’re not sure. Why not give them a goal to identify areas they can improve? You may be surprised at how many great ideas surface that could save the team some time.

Create Opportunities to Strategically Develop New Skills

With the rise of new tech like robotic process automation, artificial intelligence, and blockchain, strategically developing skills to prepare for the future of finance is more essential than ever.

The exceptional accountant of tomorrow needs to begin cultivating effective communication abilities, data analysis, business acumen, and creativity — today. These capabilities will equip teams to deliver predictive insights for leadership, drive data-based decisions, and provide expert counsel.

Developing opportunities for accounting and finance professionals to problem-solve more creatively, learn new technology, and build relationships with other departments can make a massive difference on an individual and team level.

Carefully Craft Your Culture

A carefully crafted culture creates competitive advantage. It improves quality of work, boosts productivity, engagement, and retention, and reduces stress and healthcare costs.

But if this isn’t a current focus at your company, where do you even start?

A team brainstorming session can be an excellent first step. Involving your people in culture discussions can make them feel invested and as important as they really are. They’re also the ones who will be able to quickly identify what needs to change, along with the most effective approaches.

Give your leaders the responsibility of planning regular team-building events. This can be anything from fun, off-site events to a team appreciation lunch at the office. The goal should always be to bring the team closer and help them maintain better relationships, generating understanding and a deeper respect for each other.

Put Your People First

Done right, setting smart goals for your accountants can create a shared vision that makes your teams feel inspired and connected. And when the strategies within that vision meaningfully contribute to the entire organization, you can count on a higher level of buy-in.

It all comes down to putting your people first and setting them up for success. If you continually look to the future of finance and equip your teams for the new digital landscape, your F&A organization will thrive.

Creating smart goals and creating a great culture can help F&A teams retain top talent, which is a challenge in today’s business environment.

This blog post was originally published on the BlackLine blog.

IBM Planning Analytics Tips & Tricks: 21/21/21

September 20, 2022 by Lee Lazarow

Some of you may remember an Excel feature that we wrote about a while back, which explained how the DATE function will convert invalid dates into real ones. For example, DATE(2020,7,35) will be converted to August 4, 2020, since there are not 35 days in July.

Here is where the fun begins!

This week includes the 21^st day of the month of September
September is the 9^th month of this year, which is also the 21^st month of last year
Last year was 2021

Put this all together and we have another special event happening this week …

On September 21, 2022,

the resulting date will be 21/21/21

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And if we take it a step further …

At 9:21p and 21 seconds on 9/21/2022,

the resulting time will be 21:21:21 on 21/21/21

This is why we love Excel!

Revelwood has worked with IBM Planning Analytics / TM1 for more than 27 years. We’ve partnered with hundreds of companies on the design, development, maintenance and updates of IBM Planning Analytics applications, across every industry. Have a challenge with Planning Analytics / TM1? We can help you!

FP&A Done Right: Forecasting Revenue for Services-Based Businesses: A Growth Factor

August 19, 2022 by Revelwood

More than half of professional services firms can’t forecast project revenue beyond six months. Workday’s Mark David and Justin Joseph share insights into how organizations can get revenue forecasting right, even when business is anything but usual.

What is it about revenue forecasting that can be so challenging? For people-based industries such as professional services, their project revenue is based on talent supply. And people—including all 109 billion of them who have ever lived on Earth—can be difficult to predict.

“People are highly variable,” said Justin Joseph, senior director of product strategy at Workday. “They aren’t always available. They go on vacation. And, as we’ve experienced the past few years, people leave, and there can be skills shortages. So there’s a lot of variability in how professional services companies generate project revenue.”

Beyond the variability of their employees and the impact of unprecedented trends and events, professional services firms also deal with different systems in different parts of the organization. These silos can cause data to be inconsistent and inaccurate—challenges that only get worse as an organization grows.

“The larger an organization, the more complex things get,” said Mark David, vice president of solution management at Workday. “Organizations then become more reliant on processes to manage projects and people, but that requires accurate data from disparate places.”

In this episode of the Workday Podcast, we’re 100% focused on revenue forecasting for professional services, with guests Joseph and David. They share trends impacting firms, the pros and cons of different types of forecasting, and how firms can start to solve their challenges to better plan and forecast.

Here are a few highlights of our conversation, edited for clarity. Be sure to follow us wherever you listen to your favorite podcasts, and remember you can find our entire podcast catalog here.

“The reason most companies can’t forecast their revenue more accurately is because they have different systems and data across their lines of businesses and services. And all those different systems mean that you have data that’s going to be wildly inconsistent. You’ll need a lot of integrations to pull this data together to make sure that you have an end-to-end process for revenue forecasting.” —Justin Joseph
“A year ago, a customer who runs a 5,000-employee professional services firm told me the one thing he needed was a good revenue forecast more than anything else right now. As you can imagine, this was especially needed with what’s happened over the last few years, which have made forecasting where your business is going even more difficult.” —Mark David
“With unexpected scenarios, you’re following the exact same processes as expected scenarios, but you have to forecast at a much faster pace and much more frequently because your assumptions are changing so rapidly, maybe hour by hour or day by day. How quickly can you pull this data together and then model it and share it out? It may sound contradictory, but they’re similar. Speed is ultimately what’s different.” —Justin Joseph

This blog post was originally published on the Workday Adaptive Planning blog.

IBM Planning Analytics Tips & Tricks: Adding and Editing Connection URLs in Planning Analytics for Excel

August 2, 2022 by Marc Assenza Leave a Comment

Do you know how to add a new Connection URL or Edit an existing Connection URL in Planning Analytics for Excel? Here are the steps to follow:

Adding a Connection URL

Once Planning Analytics for Excel has been launched, go into the IBM Planning Analytics ribbon click on the “Connect” button. Click the “New Connection” button within the drop down menu.

The following window will appear.

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Datasource type – This is a dropdown containing two selections: IBM Planning Analytics and IBM Cognos Analytics. For this example, we are connecting to IBM Planning Analytics.

Connection URL – The connection URL connects Planning Analytics for Excel to a Planning Analytics Workspace server. If you are connecting to a local installation of Planning Analytics Workspace, this will contain either the IP address of your Planning Analytics Workspace server or the machine name of your Planning Analytics Workspace server, examples could look as follows:

http://12.345.77.89
http://mypawserver.mycompany.com

If you are connecting to an IBM Cloud Planning Analytics Workspace Server, the connection URL would look something like this:

https://mycompanyname.planning-analytics.ibmcloud.com/

Friendly name – The friendly name is a user defined setting in the sense that you give it a name that people within the organization would recognize, and it would be something meaningful to them, an example could be:

mycompanyname DEV Server

Once the information is entered, press the Test Connection button to confirm your connection. A successful connection will result in the following message:

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Once completed, click the “Save” button.

Editing a Connection URL

Occasionally you may need to edit an existing connection URL. This may entail a change to your internal “Friendly name” or a change to the IP address of the server. Here are the steps to follow:

Once Planning Analytics for Excel has been launched, go into the IBM Planning Analytics ribbon click on the “Options” button.

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Click on the option for “IBM” on the left-hand side of the window.

You will see a list of all your existing connections. Select the connection you want to edit and click the “Edit” button at the bottom of the screen. You can then make the necessary adjustments and retest the connection.

Modern Accounting: Four Key Ways AR Automations Propel Financial Operations

July 28, 2022 by Revelwood Leave a Comment

This is a guest blog post from our partner BlackLine, explaining four ways AR automation moves financial operations forward.

Due to challenges in recent years, there’s been a shift in the way companies approach people retention—with varying outcomes.

Many organizations now offer hybrid working policies, with employees enjoying more flexibility throughout their weeks, even if it’s just the ability to do laundry at lunchtime.

On the flip side, the uncertainty and disruption has caused others to become fed up, leading them to move on to new pastures. We’re all aware of The Great Resignation—but what does this mean for AR and finance teams?

Time-consuming manual processes are a significant factor in this fight. With employees struggling to hit targets and respond to customers on time, plus battling siloed systems that don’t provide full visibility into business procedures, it’s easy to see why they’re cutting loose.

It’s clear that to retain staff and streamline operational processes, digital transformation is no longer a nice-to-have—it’s a must-have.

Banish Back-Office Blues with AR Automation

AR automation raises the bar in business performance.

By moving AR to a different beat, businesses can make small changes to their every day that triggers a big change their operational success. Not only that but automating AR can inform more strategic decision-making and drive better financial outcomes—a win-win for both people and business.

It’s time to MOVE on from manual:

M—making better decisions

O—operational success

V—visibility into the future

E—employee satisfaction

And AR is for automating.

1. Making Better Decisions

Let’s be honest: most manual AR practices don’t lead to effective data utilization. And few companies have the necessary tools to make best use of their available data, or action the insights it gives them.

AR automation can fill this gap. By surfacing critical information that is typically difficult to obtain, finance leaders can improve strategic decision making across all areas of business.

This leads to better business outcomes all around, as well as helping you to identify potential growth areas within your existing customer base.

2. Operational Success

Unnecessary process errors. Duplicated effort. Customer disputes. These are just some of the AR challenges your staff are tasked with that can have a serious company-wide impact.

Automating repetitive tasks results in less complications to deal with. Teams can more promptly resolve customer disputes, building better relationships and elevating business reliability and reputation.

On top of this, teams are not only better placed to hit their targets but are also able to dedicate more of their time and energy into work that really makes a difference.

3. Visibility Into the Future

Senior board members are tasked with, among other things, keeping external shareholders happy. They’re (understandably) mostly concerned about revenue, and that is directly informed by a healthy cash flow.

AR automation gives you full insight into your cash position, providing you with everything you need to deliver detailed reporting to shareholders.

Not only could this help secure future investment, but it also contributes towards financial resilience. The more you know about your cash position, the more informed decisions you can make to protect your business.

4. Employee Satisfaction

While WFH has generally gone down a storm, hybrid working can throw up just as many pitfalls as perks. With staff split between home and office, siloed teams may not have full visibility over entire processes, damaging collaboration and significantly hampering productivity.

By implementing AR automation that takes care of admin under one unified platform, staff can take care of adding value elsewhere, putting their expertise to best use: achieving financial goals.

Plus, with staff feeling happier and more supported, they’re less likely to become another ‘Great Resignation’ statistic—and you won’t lose out on all the best talent.

By moving to a different beat with BlackLine, you’re realizing the true potential of AR: as an integral back-office function that contributes significantly to business success.

This blog post was originally published on the BlackLine blog.

IBM Planning Analytics Tips & Tricks: Excel DELET Function

July 26, 2022 by Lee Lazarow Leave a Comment

A while back I wrote a blog about the SCAN function which showed how you can search for specific characters and then combine this with the SUBST formula to create new sets of text. But what if you wanted an easier way to simply skip some characters within the string? This can be done with the DELET function.

The DELET function is used to delete a set of characters from within a string. The syntax of the command is:

DELET (string, start, number)

String = the source text string
Start = the character where deletion will begin
Number = the number of characters to delete

For example:

DELETE (‘phone’, 2, 3) returns ‘pe’

This function can be used to perform tasks such as removing dashes in between an element code number and name or removing a prefix from a list of elements. This will simplify your code by allowing you to simply ignore some text instead of merging two substrings together.

Workday Adaptive Planning Tips & Tricks: Data Integration and the Excel Spreadsheet Data Source

July 20, 2022 by Marc Assenza Leave a Comment

Did you know that Workday Adaptive Planning can use Microsoft Excel Workbooks as Data Sources for Data Integration?

It’s true! The process is surprisingly simple if a few basic rules and steps are followed:

Your column names, positions, and formatting should remain consistent once you decide upon the layout. In the example below, Period, Value, Account and Level will always be in the same order with the same consistent formatting on a moving forward basis.

The name of your worksheet within the workbook will need to remain the same. Within the Workday Adaptive integration, the worksheet name becomes the table name in the Design Integrations task pane. As a side note, if you have multiple worksheets as part of a workbook, each worksheet becomes an available table to use for that spreadsheet data source. See screenshot below:

ALL row and column values must be exactly that, values. There cannot be any formulas or summed totals on the spreadsheet

Import your Spreadsheet data source through the easy-to-use Actions Pane link named “Import Spreadsheet.”

Follow the automated prompting.

Ensure your workbook was uploaded by viewing it in the Data Sources data pane.

Open your Data Source and locate your table from the Data Components Pane.

Drag your table into the Staging area to review and query the data.

That’s all it takes to import an Excel Workbook as an Excel Spreadsheet Data Source. Be on the lookout for more Workday Adaptive Data Integration tips and tricks from me in the future!

Visit Revelwood’s Knowledge Center for our Workday Adaptive Planning Tips & Tricks or sign up here to get our Workday Adaptive Planning Tips & Tricks delivered directly to your inbox. Not sure where to start with Workday Adaptive Planning? Our team here at Revelwood can help! Contact us info@revelwood.com for more information.

IBM Planning Analytics Tips & Tricks: PAW Escape Character

July 5, 2022 by Revelwood Leave a Comment

Have you ever been in a situation where you have an element name with an apostrophe (or two) in IBM Planning Analytics? Examples of this might entail last names such as “O’Connor” or “O’Sullivan”?

Although IBM best practices specify that the apostrophe is a special character to avoid in object and element names, in many instances you’ll see an apostrophe used in your data source (especially in names and brand names).

Planning Analytics confuses the apostrophe as a single quote … which is a special character used to define literal strings. You can resolve this situation by using an “escape character.” An escape character invokes an alternative interpretation on the characters which follow.

The Planning Analytics escape character sequence defines 2 single quotes together as the equivalent of 1 single quote.

Example:

‘O’’Connor’ will display as ‘O’Connor’

This escape sequence can be used in both Rules and Turbo Integrator processes.

This approach will allow your use of O’Connor to properly work instead of causing you to convert it into “oh darn”!

Budgeting Planning & Forecasting

Different plans for different needs

The essentials of long-term planning

Growth percent approach

Driver-based approach

Mitigate risk with long-term planning

How to Write SMART Goals for Accountants

Make Your Goals Specific

Make Your Goals Measurable & Attainable

Make Your Goals Relevant & Time-Bound

Strategies for Effective Goal Setting

Take a Project-Based Approach

Create Opportunities to Strategically Develop New Skills

Carefully Craft Your Culture

Put Your People First

Read more about Modern Accounting:

Read more IBM Planning Analytics Tips & Tricks:

Read more FP&A Done Right posts:

Adding a Connection URL

Editing a Connection URL

Read more IBM Planning Analytics Tips & Tricks:

Banish Back-Office Blues with AR Automation

1. Making Better Decisions

2. Operational Success

3. Visibility Into the Future

4. Employee Satisfaction

Read more Modern Accounting blogs:

Read More IBM Planning Analytics Tips & Tricks:

Read more Workday Adaptive Planning Tips & Tricks:

Read more IBM Planning Analytics Tips & Tricks:

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