Nine steps to simplify your FP&A process

fpa process improvement blog
January 10, 2017

Here at Workiva we like to talk a lot about simplifying reporting. But what do we mean by “simplifying” your financial planning and analysis (FP&A) process?

Put simply, it means: spending less time preparing a given report that meets your requester’s needs—whether that requester is internal or external.

The benefits are self-evident. First, you and your team will save time in preparation. Second, you’ll be able to deliver great reports quickly. These will feed the processes that help your team become a world-class finance organization. Corporate executives want more information and more analysis to aid their decision-making.

In this blog post, we highlight the universal reporting challenges faced by finance teams, discuss strategies for improving the overall reporting process, and provide suggestions on how to apply the framework to your FP&A process.


Universal reporting challenges

If your company is like most, you report on a complex corporate environment with multiple business units and legal entities.

According to an EY Global Financial Accounting Advisory Services group study, 82 percent of the 500 enterprises surveyed have more than five business units, while 50 percent have more than 10 units.

And these business units typically rely on multiple systems for their reporting data. To wit, EY found that 74 percent of the enterprises surveyed relied on more than 6 reporting systems—such as ERP, SAP, and ledger systems—while 20 percent had more than 15.

Worse, all of these legal entities, business units, and reporting systems are in a constant state of change to meet stakeholder demands.

The volume and frequency of reports have also been steadily increasing. According to the EY study, 69 percent of external stakeholders also want more frequent reports.

Government regulations are on the rise, and the U.S. Department of Justice and other entities are increasingly holding individuals personally liable for reporting failures and errors.

Common reporting tools fall short


A fundamental problem for reporting managers is that the primary desktop-based tools they use to do their jobs, including business intelligence tools, have not kept pace with business reporting requirements.

In fact, these tools were never designed to handle the complexities of business reporting. Instead, they bring their own set of challenges, including:

  • Accessibility issues
  • Version control issues
  • Lack of true collaboration
  • Security issues
  • Lack of consistency
  • Lack of efficiency
  • No accountability
  • Complex training and IT assistance

Sound familiar? It’s not surprising that 60 percent of the respondents to EY’s survey said they agreed or strongly agreed that their organizations' reports did not contain the right information.

Weak tools result in substantial non-value add time spent by your team to make up the tool gap. How much time does your team spend reconciling the same numbers across multiple reports? How about copying and pasting tables? Reformatting reports or slides? Mitigating the high risk of error?

And how do all of these factors affect team stress levels and employee retention?

A 2014 survey of FP&A professionals conducted by GTNews found that 66 percent of respondents spent over 9 hours a month on non-value add activities, while almost a third spent more than 20 hours a month.

Strategies for improving your FP&A process

At Workiva, we’ve developed an overall approach to simplifying reporting processes based on our work with thousand of customers. It typically begins with simple questions. Here, we break it down.

Step 1: Understand report objectives
What is the purpose of the report? Is the information relevant? What source information is necessary, and what is extraneous? Is the source information shared with any other reports? Who receives the report? Does information in a particular report overlap with other reports? Can similar reports be consolidated into one?


Step 2: Map your team’s reporting process
Next, map your team's process from start to finish. A whiteboard is particularly useful for this purpose. What are all of the inputs and outputs? Who is involved both in and outside of your team? How is everything connected? Who receives it, why, and at what frequency? How many hours does your team's outputs take to produce?

Don’t be surprised if the resulting diagram of your process looks like this:

Now that you understand what goes into the report, you can begin to transform the process into something that benefits you.

Step 3: Collect and normalize data
Normalize your data during the collection process. Create common templates for all contributors to submit data. Templates can be used for both unstructured and structured data.

Step 4: Organize information
Organize source data into a central location, so reporting teams can maintain control over the extensive, continuously changing information needed to meet evolving stakeholder requirements. For additional control, link data straight from templates into the central location, so the repository is always up-to-date with data from the field.

Step 5: Create a single source of truth
Eliminate TMMP (too many moving parts). Establish a linked approach between source data and all of its destinations. Link from your central location out to individual reports, connecting silos of information across the enterprise. By connecting the data in this way, changes can propagate through all destinations. This enables you to update the report draft precisely and accurately.

Establishing a single source of truth for your reports is critical. It not only eliminates errors (and reduces non-value add time), but it also provides audit trail evidence and gives greater confidence up the approval chain. It enables you and your team to create an auditable process that provides visibility into data linking, formatting, and changes.

Step 6: Collaborate in real time
Real-time collaboration allows users to work in parallel. Establish technology that allows team members to work on separate report sections concurrently, without version control issues.

Step 7: Review, approval, and sign-off
Establish a review process where project teams can review contributor feedback in real time in one active document. Having one active document enables geographically distributed teams to work together while building a cohesive story for management, stakeholders, and the board.

Step 8: House final reports in one location
Provide an environment where you can leverage your certified and trusted source information and have it publish to narrative reports, dashboards, workbooks, and presentations. Again, this simplifies the process and reduces non-value add time.

Step 9: Leverage technology to improve your process
So this sounds great, but how do you do that with your current file-based software? Answer: You can’t!

The good news is that there are new software as a service business reporting solutions like Wdesk to enable you to take these steps.


Applying the framework to your FP&A process

Here are a couple of ideas and suggestions for applying this framework to your organization.

First, leaders set the tone for the team and for change. Be a thought leader, and help drive change in your organization.

Second, identify key, high-frequency reports, e.g., monthly reports that could benefit from process improvement.

Third, listen! Listen to your requesters/business partners. What do they actually need? Challenge them! Listen to your team—get them involved. How are they actually preparing these reports? Why do they do it the way they do? Get their input, feedback, and ideas to help obtain their buy-in. Keep them engaged and involved with the changes.

Finally, implement process improvements in phases. Be realistic—see what works and what doesn’t. Reevaluate processes with the team. Remember, process improvement is always a work in progress. Strive for continual improvement in both your process and reports.

Real-world benefits of process improvement

We commissioned the highly respected Forrester Consulting firm to determine the Total Economic Impact (TEI) for several companies that transitioned from Excel® spreadsheets and Word® documents to Wdesk. The results were dramatic.

A major airline—that relied heavily on antiquated physical paperwork along with external professional service firms—decided to move to our cloud reporting platform. The team used Wdesk for internal and external financial reporting, management reporting, board reporting, and sustainability reporting. The airline found that Wdesk not only provided version control and better tracking, but that it shortened the time required to produce reports, enabling better deadline management.

Forrester determined that the airline’s ROI on its investment was 187 percent, with payback in less than 3 months. In addition, the airline reduced its security risks by using a cloud platform.

Similarly, a multinational manufacturer who relied on a patchwork of emails, spreadsheets, text documents, and external services to manage its reporting processes—compiling a typical financial report involved sorting through some 600 emails with attachments—also adopted Wdesk. In doing so, it saw improvements in version control, its ability to collect data from numerous sources, and collaboration, and also refined its security posture in handling sensitive data. Forrester estimated the company had a 108 percent ROI with a payback in 2 months. Overall, its data aggregation workload was reduced by 90 percent.

Now what?

I hope this article has given you an appreciation of the universal reporting and the strategies that you can use to improve your organization’s FP&A process. For more information, check out a few of our other resources on process improvement.

Excel and Word are registered trademarks of Microsoft Corporation in the United States and/or other countries.

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Mike Sellberg

About the author

Mike Sellberg is Executive Vice President and Chief Product Officer at Workiva. He is the former EVP and CTO at iMed Studios and the former Divisional General Manager at Engineering Animation, Inc.