Whether you started your own business from scratch or worked your way up through a company to become an executive or CEO, your career successes show how hard you worked, what kind of person you are, and how dedicated you are. On your way to winning, you’ve undoubtedly faced your fair share of problems. Now, you might be trying to figure out how to make the most of your money and set yourself up for success in the future.
Most of the time, financial and planning problems for corporate leaders are similar, and they can benefit from professional help in the following areas:
1. Departments not working together
Data gaps happen when teams don’t talk to each other. This makes it hard to plan your finances because you will need access to all the information. Most of the time, data gaps happen in more prominent companies with many moving parts. Each department has its budget and goals, but if they don’t talk to each other and share information, they might not match up with those of other departments. This can lead to tactics that go against each other.
Having departments that don’t talk to each other can cause: • Incomplete data, so you can’t see the complete financial picture of each department.
• Inconsistent data: The information you get might not match what’s happening. • Duplicate data: You end up doing the same jobs twice, which causes you to go over budget. • Limited collaboration: Departments can’t work together to reach the same financial goals.
Solution
The trouble is caused by systems that need to be fixed. Each department has its own programs and data management tools, so no one has a complete picture of the company’s financial health.
Instead of each department buying its software, you can combine it using a centralized and consistent financial planning and analysis system. This way, everyone can import or enter data into the same database, which serves as a single source of truth.
To avoid data silos, look for the following signs and deal with them quickly so your business can continue. Some of the most obvious signs that your groups aren’t working well together are:
• Data that doesn’t match up; • Information that’s missing; • Multiple prices that go over budget
Fix these problems by setting up a common data system that everyone can use.
2. Can’t talk to each other
About 86% of workers say poor communication is the main cause of most workplace mistakes. On the other hand, companies that communicate well see a 25% rise in productivity.
You need to talk to each other to align your financial goals across areas, find out what problems each team faces, and solve problems quickly to stay on track with your budget.
Long response times are one sign of lousy communication at work. If your teams wait for feedback or permission to spend money, this can slow them down. It could also lead departments to make their own financial choices so they don’t have to wait, which can throw off your plans and cause you to spend more than you had planned.
Solution
Your teams can talk to each other through software integrations that instantly send information to a central system where everyone can see and work. This keeps all departments on the same page.
Collaboration platforms like Slack, Microsoft, and Asana will also make it much easier for people in different departments to talk to each other. This will help ensure that your company’s financial plans match the goals of each department so that everyone is working towards the same goals.
2. Bad quality of the data
Most people in finance know what it’s like to reconcile an account only to find a difference. Minor disagreements are usually straightforward, but big ones can destroy your financial plan.
Poor data quality is often to blame for differences. For instance, each team may have kept track of its spending in its accounting software but may have yet to send the information to the finance department.
Multiple mistakes are also a sign of bad data quality. When you put the same information into different databases, you are more likely to make mistakes in the data, making your numbers not match up.
Solution
By connecting all your records to a central database, you can be sure you have the most up-to-date and accurate information. For example, when each department records how much money it spends, the data is changed in real-time in the master database. This means that your accounts always match, making reconciling your funds easier.
For example, you can link your HRIS and payroll data by integrating apps like Paylocity or Peoplesoft into your master database. HR enters information into its system and sends it to your central database so the financial team can track and examine it. The transfer process has a few mistakes because HR doesn’t have to re-enter the information.
4. There are too many manual jobs
Repeating the same action several times a row is an example of a repetitive manual job. For example, entering numbers into a spreadsheet is so repetitive and predictable that you can program a computer to do the same thing.
Manual jobs not only take your team away from other vital tasks but also make mistakes more likely to happen. For example, errors can occur when entering the data for the first time or when the data is moved directly from one system to another by re-entering the numbers and information on a new spreadsheet.
The average number of mistakes made when entering data by hand is 1%. But that varies a lot based on how the manual entry is done. For example, there is a bigger chance of mistakes when someone types in information from a paper form. This is because you must consider hard-to-read notes when you type up a written statement.
Solution
With the latest improvements in automation and artificial intelligence, computers can do many time-consuming jobs that are prone to mistakes and take up a lot of time.
Automation can save your company money by eliminating manual jobs that are hard to do and take up a lot of time. Your workers could instead use that time to grow your business in other ways.
You can automate jobs like collecting data, approving requests, keeping systems and information up-to-date, looking for mistakes, and entering data.
• 5. Planning takes a long time. A thorough business will make a cash plan for the whole year. It should have detailed reports and budgets for each month of the following year. For example, it could show how much money is expected to be made or lost.
• But making a full report might take a lot of time, which is a problem. You might want to start earlier so that your plan is done before the next fiscal year, but if you do that, you risk using outdated information. But if you wait until the last minute to plan, you might be more rushed and make more mistakes.
Solution: Using software to plan your finances cuts the time it takes to prepare for the year by a considerable amount. You won’t have to start as early and won’t have to worry about working with old information months in advance. Instead, you can use the most up-to-date information and make thorough reports about how much you expect to spend and earn.
• For example, Vena software makes payroll and benefits planning more accessible by using pre-built calculations that can prepare for benefit changes, salary raises, and bonuses. This reduces the amount of time you have to spend on those calculations.
• 6. Not being able to grow
• The tools you use to plan your finances should grow as your business does. For example, a traditional spreadsheet might have worked when you had less than 100 workers, but you will eventually reach a point where you can’t do the same things on that spreadsheet. Financial planners have difficulty keeping up with the same detailed financial plans while using old planning tools and software that didn’t grow with their business. But they aren’t ready to change because they are used to spreadsheets and are happy with them. This can lead to mistakes, delays, and poor work.
• For example, if your business added 12 new people over the next year, how easy would it be to add their salaries to your financial plan? Using old systems or spreadsheets that you have to fill out by hand could be very time-consuming because you’d have to change the numbers and do the maths by hand. This could also lead to mistakes.
Solution
• To stay on top of your business needs, you need financial planning software that lets you change the size of your charts. Instead of spending hours entering tasks by hand, you can easily add new information to a method you already know. For instance, Vena lets you add to your spreadsheets to make them scalable, so you don’t have to switch to a new system as your business grows.
So, you can change your financial plans as you put further information into your HR system. Because each area is built into your financial planning software, any changes are made to your central system and can be seen by everyone. Also, your platform will do any reconciliation work needed to adjust to the new data. This will take care of that job and ensure you have the most accurate information.
• 7. What to do when something unexpected happens
• Your financial plans are just estimates, and most of the time, they won’t match up with your actual numbers each month because business is full of surprises. COVID-19 made many companies consider the problems that could come from quick and unexpected changes. Even people who had backup plans found it hard to change their plans.
• Long-term financial goals are more likely derailed by changes coming out of the blue because you must plan for the next two to five years.
• For instance, will petrol prices go up in the coming year? Will you have trouble getting something you need? Will sales at your business suddenly increase, or will a new competitor cause sales to drop?
•Solution
• You can’t plan for the unexpected, but you can make a flexible financial plan that lets you make changes as new problems arise. This will give you the money tools you need to deal with whatever comes your way.
• Businesses have moved to more flexible business methods, which has led to the rise of agile project management. No longer do people make one plan that lasts for several years. Today’s market is moving quickly because there is a lot of knowledge available, technology is improving, and consumers have more power. It’s constantly changing, which means that companies have to change too.
• Changes are considered in agile planning; don’t use a set plan. Instead, it uses a cash plan based on odds. Then, you get feedback from your workers and customers often, so you can change your plan as needs change.
• An example of agile financial planning is making a budget for each team’s long-term goals instead of keeping track of every small project. This means that teams don’t have to stick to the original plan and can change their budgets to meet customer and staff needs.
• About 71% of U.S. companies use Agile project management today. Those who use it saw their sales go up by 60%.
• The best way to deal with the unexpected is to prepare for it. If you’re ready before significant changes happen, you can quickly make the business changes you need to meet the challenge instead of rushing after the fact.
Even though the economy is unclear and technology is changing quickly, growth is still possible. But just because times change doesn’t mean you have to give up everything you know and are used to
