Financial planning and budgeting are critical activities for any business, large or small. Having a well-defined financial plan and budget in place is key to making informed business decisions, managing cash flow, tracking performance, and ensuring profitability and growth.
For modern companies, financial planning and budgeting can be complex undertakings given today’s dynamic business environment. Financial plans must account for economic changes, evolving strategies, compliance requirements, and other variables. At the same time, budgets need to align with plans while being flexible enough to accommodate shifts in priorities. This is where a powerful platform like NetSuite can help.
NetSuite is an end-to-end cloud business management suite that unifies financial management, planning, budgeting, reporting, and more on a single platform. With NetSuite, companies can streamline financial planning and budgeting workflows to enhance visibility, control, and agility.
This article provides an overview of key considerations for financial planning and budgeting, and explores how NetSuite enables more strategic, collaborative, and adaptive approaches in these critical finance areas.
Key Financial Planning and Budgeting Considerations
Financial planning and budgeting share some common goals and best practices, but also have some distinct requirements as outlined below:
Financial Planning Key Activities
- Forecasting revenues, expenses, capital expenditures over a 3-5 year horizon based on business goals and macroeconomic factors
- Modeling different growth scenarios and projections
- Linking financial forecasts to operational drivers
- Assessing capital requirements and financing options
- Performing risk analysis through sensitivity testing
- Updating projections as conditions change
Best Practices for Effective Financial Plans:
- Involve all key stakeholders in planning process
- Leverage driver-based modeling for dynamic forecasts
- Maintain version control and audit trails
- Continuously monitor performance vs. plan
Budgeting Key Activities
- Determining financial resources needed to execute strategic plans and initiatives
- Setting targets for revenues, costs, profitability, cash flow
- Allocating resources across business units and programs
- Gaining buy-in and commitment from budget owners
- Monitoring actual spending vs. budget
- Updating budgets periodically based on latest projections
Best Practices for Budgeting:
- Link budgets directly to financial plans and business objectives
- Collaborate across departments to align budgets
- Build in flexibility to adapt budgets as conditions change
- Enforce accountability through ownership and reporting
- Maintain audit trails for compliance
For both financial planning and budgeting, automation, centralized data, and collaboration capabilities are essential for supporting complex processes, enabling rapid iterations, and ensuring alignment.
How NetSuite Enables Strategic Financial Planning and Budgeting
NetSuite is designed to help companies move beyond spreadsheet-based financial planning and budgeting by providing:
- A unified platform connecting planning, budgeting, forecasting, reporting, and operational data
- Sophisticated modeling capabilities for dynamic plans and budgets
- Collaborative workflows to engage all stakeholders
- Continuous monitoring of actuals vs. plans/budgets
- Flexibility to quickly adapt to changing business conditions
Key NetSuite capabilities that facilitate strategic financial planning and budgeting include:
Unified Financial Data
NetSuite integrates financial data across transactions, planning, budgeting, reporting, and analytics in real-time through a single, trusted data source. This enables continuous monitoring and forecasting.
Driver-Based Modeling
NetSuite’s planning and budgeting engine allows businesses to define drivers that link revenue, cost, and other projections to corresponding operational metrics. This enables dynamic forecasting based on different growth assumptions and scenarios.
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Interactive Dashboards
Real-time, self-service visualizations and reports allow modeling of different what-if scenarios and monitoring of budget vs. actuals. This facilitates rapid decision-making.
Collaborative Workflows
NetSuite’s workflows foster engagement across the organization with capabilities to support:
- Template distribution
- Assumption gathering
- Allocation and adjustment
- Annotation and commentary
- Version control
adhoc Analysis
With self-service ad hoc analysis capabilities, planners can dive deeper into plans and budgets to quickly answer unanticipated business questions.
Integration with CRM and ERP
As NetSuite unifies CRM and ERP capabilities, budget owners get visibility into customer and order data that drive their departmental budgets. This enables continuous tuning.
Audit Trails
Comprehensive audit trails, approvals, and access controls help ensure compliance and security of sensitive planning and budgeting data.
Rolling Forecasts
NetSuite enables rolling forecasts where budgets can be adjusted monthly or quarterly based on the latest business trends and selections. This improves responsiveness.
Financial Planning and Budgeting: Best Practices
While NetSuite provides robust technology to support advanced financial planning and budgeting, companies should also leverage business best practices to help ensure effective processes including:
- Gaining executive sponsorship to reinforce financial rigor across the organization.
- Establishing a dedicated team to coordinate planning and budgeting activities.
- Defining standard calendars, templates, guidelines, and formats upfront.
- Communicating objectives, assumptions, and drivers used in forecasts and budgets.
- Linking budgets to specific programs, initiatives, and business objectives.
- Enforcing accountability through ownership and reporting of plans/budgets.
- Incorporating both top-down and bottom-up participation to surface insights.
- Automating data integration from source systems rather than relying on manual inputs.
- Providing self-service analytics to allow drilling into details behind numbers.
- Updating financial projections continuously as part of rolling forecasts.
- Tying budget funding to leading indicators and results delivery.
- Identifying variances between projections and actuals and addressing root causes.
- Establishing processes for ongoing plan revisions and budget change requests.
By combining NetSuite’s unified platform and robust modeling capabilities with strong business practices around process, governance, and collaboration, companies are better equipped to streamline financial planning and budgeting to become more agile, informed, and strategic.
Why Choose SuiteRep for NetSuite Implementation
With 300+ successful NetSuite implementations, SuiteRep has deep expertise in deploying NetSuite to enable strategic financial planning and budgeting.
SuiteRep’s certified NetSuite consultants help companies:
- Assess current processes and identify improvement areas
- Map business requirements to NetSuite capabilities
- Configure NetSuite to meet planning, budgeting, and forecasting needs
- Integrate NetSuite FP&A with other systems
- Develop driver-based models for dynamic planning
- Create KPIs and reports to monitor performance vs. plans/budgets
- Train planners and budget managers on NetSuite tools
- Optimize processes through continual enhancement
SuiteRep accelerates implementation leveraging ReadyVue, a solution accelerator that jumpstarts NetSuite FP&A setup with pre-built templates, examples, and best practices.
With deep NetSuite expertise and over 100+ FP&A engagements, SuiteRep helps organizations harness NetSuite’s FP&A functionality to gain agility, visibility, and control.
Conclusion
Financial planning and budgeting are pillars of financial management. NetSuite provides an integrated platform to unify these critical activities and help modern businesses be more dynamic and collaborative. Combined with strong FP&A business practices, NetSuite can transform financial planning and budgeting to be more strategic value drivers. Partnering with a solution provider like SuiteRep ensures organizations get the most from NetSuite’s FP&A capabilities.