Financial planning makes a significant contribution to the success of a business. Without financial planning and strategy formulation, companies can easily fall into the trap of spending more than they should, accumulating debt, failing to serve their customers properly and ultimately going bankrupt.
Why is financial planning important?
For larger companies, budgeting is usually an automatic task, but it is a question of the efficiency and quality of the plans prepared. In many cases, however, it is not even clear that such plans and analyses are being prepared in smaller organisations.
Financial planning makes it clear when to expect revenue, plan expenditures, or schedule improvements. This process ensures that the company does not overspend.
The steps to budgeting
The first step in budgeting is to fill in the revenue side with data. What were the revenues of the previous year and what are the projections for the current one? What is known for sure and what is still pending? Summarising these provides information on how much money the company can accumulate in a given period, typically during a year.
The next task in financial planning is to collect the fixed and variable costs. Fixed costs are those that must be paid in all circumstances, regardless of how the business is doing. For example, rent for an office/shop or insurance. Variable costs are expenses that vary in proportion to the profitability of the business. For example, if the real estate agent sells more property, the company must pay more commission.
It is also worth considering unexpected costs. This may seem contradictory, because if the problem is unexpected, how can you allocate money for it? That is why it is better to call it an emergency fund that can be accessed if necessary.
Once all the data is collected, analyses, statements and predictions can be used to assess what to expect in any given period. This is how corporate financial planning is put together step by step.
Financial planning with Jedox
Jedox is an EPM platform that brings together business intelligence and performance management tools for effective financial planning. It helps companies create self-service budgets, build intuitive data analytics based on artificial intelligence (AI) tools, and visualise data to capture, understand and review data. The software allows analyses to be built on the same model and follow the same logic, allowing for interoperability and comparison.
Jedox instead of Excel
Jedox builds on Excel but goes beyond it. Excel is the "sacred cow" of most organisations, providing solutions and background for financial calculations for decades. The problem with the familiar Excel spreadsheets is that working habits have changed a lot in the last 40 years: people want to have instant access to data and of course, it is not a disadvantage if Excel spreadsheets are updated at the same time as changes are made.
Excel has been replaced by more modern solutions in the past few years, such as Jedox. The advantage is that it builds on the well-known rules of Excel, which means that staff gets used to it more quickly, accepts it and prefers to use it. In other words, it is easier to replace Excel, while at the same time taking the benefits of spreadsheets to a higher level.
The benefits of Jedox
The advantage of Jedox is that financial planning can be tailored to suit the client's needs, thus providing the most effective solution for individual circumstances. Crucially, it is easy to connect to data sources, whether in the cloud or on a computer. Thanks to the GPU, the latest in-memory computing technology, data is delivered in real-time, which is a factor that is not negligible in terms of competition.
Security is one of the biggest IT challenges of our time. The software uses granular data governance, whereby permissions and access are managed flexibly (even at the cell level) and simply, ensuring that only authorised people have access to each data source.
The secret of Jedox's effectiveness lies not only in the fact that it builds on Excel's body of knowledge but also in the availability of templates within the system that greatly simplify and speed up the work, especially for those who are new to the interface. Pre-prepared templates ensure that material is quickly produced, whether it is a report or a workflow.
The Jedox Mobile App can be installed on Android and iOS devices. With the app, you can access company data and reports anywhere and anytime, which is a great convenience in the age of telecommuting.
At Bixpert, as an IT services company, we find the best solution for our clients. We believe that the future lies in modern technology, and we are not afraid to innovate. That's why we have partnered with Jedox! Click to learn more about our company and Jedox!
