Connecting Forecasting to the Close

The annual planning process is one of the most strategic events for a company. It defines how a company will tactically execute its vision and meet its goals. Surprisingly, 85 percent of executives spend less than one hour a month on strategy, and over 60 percent do not link strategy to execution.

An integrated close process links the planning and forecasting processes in order to provide a reliable and consistent predictor of actual operating results. In doing so, it enhances the control environment, reduces costs, and improves an organization's standing with external stakeholders.

The Challenge

In today's "here and now" business environment, many organizations have underinvested in the infrastructure of their finance department. Large ERP implementations -- many of which failed to deliver expected results -- and endless documentation of internal controls have diverted funding away from core finance processes and infrastructure. This, combined with acquisition and divestiture activity, has left many organizations with disjointed data based on different definitions and standards across departments.

What's more, many organizations have detached the management reporting function from financial reporting to better support operating units. While in theory this places better information in the hands of operating managers, it can have disruptive and unintended consequences.