FP&A teams are the key players in a new movement combining strategy, data, and collaboration. With support from solutions-driven technology, strategic finance teams can support the business to make wise decisions during uncertain times – paving the way for a new type of strategic finance that boardrooms are eager for.
But the pace of change can be overwhelming, and transforming your finance function is a complex process. Assessing the top trends in financial planning and analysis will help you to prioritize areas for your business to grow in the next year.
One of these trends could be just the thing you can apply in your context for greater success. So, to cut through the noise, here are the top 7 FP&A trends to watch and incorporate to your strategy in 2024.
Trend 1: Spotlight on Scenario Planning
Economic volatility, big layoffs, and global uncertainty are necessary realities for businesses to confront. Executive leaders need to understand the implications of different scenarios more than ever before.
How quickly can your finance team gather data, run custom reports, analyze, share with stakeholders, and advise on urgent decisions?
Only 16% of FP&A departments can run scenarios in less than one day, and 20% are unable to run scenarios!
The ability to create scenarios has been a seismic change in corporate finance. And in 2024, scenario planning is one way that FP&A teams can offer significant value to the entire business. Scenario planning requires analytics plus imagination – the ability to notice outlying factors and the effect they could have on your sector or organization.
To grow in your scenario planning ability, look for FP&A tools that:
- Fix the frustration of duplicating spreadsheet models, allowing you to quickly edit assumptions, see the impact of a new scenario, and compare it to others.
- Assist you with coordinated scenario planning – so your forecasts are informed by the knowledge that your business unit leaders have.
- Use powerful EPM models to help you generate intelligent forecasts from industry-informed templates
Trend 2: Analysts Require Real-Time Data and Dashboards
It’s time to say goodbye to manually creating and circulating custom stakeholder reports (that are stale by the time they’re received!) In 2024, analysts will prefer FP&A tools that create custom dashboards for business partners to access at any time.
Organizations need accurate and real-time data to adjust and make changes at the speed of business. Analysis and reporting cycles that take 1-2 weeks leave the business with an unfortunate gap in the middle of each period where stakeholders are waiting for updates (and potentially missing strategic opportunities).
Modern FP&A software integrates business systems to display the latest data from all business units. This makes it infinitely easier for FP&A to provide the strategic advice that business partners need to take action. Look for tools that:
- Gather all the business’ financial and critical operational data under one umbrella to avoid disconnected siloes.
- Generate accessible, accurate reports & dashboards for you and your stakeholders to see financials in real-time.
Trend 3: FP&A Becomes the Center of Strategic Collaboration
In 2024, FP&A teams have the opportunity to become the heart of strategic decision-making through effective collaboration and coordination.
“FP&A has the potential to connect insight to action in every area of the business. As businesses grow more complex and hungry for valuable, data-driven insights, an integrated approach to strategic finance and operational engagement is the surest way forward.”
Brian Camposano, CEO, Stratify Technologies
If your team uses bespoke, complex Excel models, it’s difficult to encourage collaboration or communicate with business partners about potential implications for the business plan. In 2024, make it your goal to support the business to make data-driven decisions. This is much easier when budget owners have access to financial, workforce, and operational data.
Look for FP&A software that allows non-finance users to proactively contribute to finance workflows. They should be able to monitor real-time financial and operational performance so all departments are working together – with permission-based access controls to put security first.
Trend 4: Digital Innovations Stay in the Budget
Despite corporate budgets cuts in multiple areas, executives will still prioritize financial software investments in 2024.
58% of finance leaders plan to increase their spending on IT and digital transformation in 2024.
If your FP&A team still leans on Excel but you struggle with version control and constant reiterations, it’s time to find a tool that will serve you better (keep reading… lots of great choices are Excel-friendly!). But there is still plenty of room for discernment, since not every tool will be the best fit for your business.
What are key differences between legacy tools and modern FP&A software?
- Automation and efficiencies in a modern budgeting and forecasting tool support positive business outcomes like savings and growth.
- Modern FP&A tools close the gap between business planning and execution by increasing agility. You don’t need to rely on expensive outside consultants or IT specialists to make adjustments to your models.
- They streamline the process of gathering inputs from all departments in the business, giving you the freedom to be a strategic collaborator.
Next gen software solutions like Stratify recreate your plan using configurable business logic from a bank of drivers that all customers can use to efficiently build (and modify) their plans, forecasts, and scenarios. Making changes is easy and doesn't require support from expensive consultants.
Trend 5: Fighting Analyst Burnout With Automation
Burnout is a real struggle in professional life, and finance is no exception. Of finance and accounting employees surveyed by London-based fintech LemonEdge:
- 31% planned to leave the industry due to high stress.
- 36% attributed their heightened stress to “time consuming manual processes.”
Some doom and gloom reports say that automation will put us all out of jobs. But when used effectively, automation takes a big burden off the shoulders of financial analysts.
Finance teams should adopt FP&A software solutions to automate time-consuming processes like data gathering, data sanitation, aggregation, report creation, and more. Headcount reconciliation, and workforce planning in general, are new areas where FP&A software streamlines a notoriously tedious process.
Rather than stealing jobs, these automations could actually pave the way for higher retention and employee satisfaction rates, allowing analysts to use their talents for more fulfilling strategic work.
Trend 6: Spreadsheet-friendly Platforms Stay Popular
Despite the challenges of hidden formula errors and limited collaboration, spreadsheets are still the default budgeting and forecasting tool for many organizations (including 64% of SaaS leaders).
We see the future of strategic, coordinated planning happening in driver-based applications, not complex spreadsheets. But it often makes sense to do ad hoc modeling in a spreadsheet interface. Modern FP&A platforms are innovating to meet in the middle and combine the familiarity of Excel with the precision and accuracy of 3rd gen FP&A software solutions. When these two are combined, analysts can model in an Excel-like platform, drawing on structured, connected data using formulas they can easily understand. It’s an excellent way to get the ball rolling towards bigger digital transformation in your finance tech stack.
In 2024 and beyond, FP&A tools with a spreadsheet capabilities will be a popular choice for teams seeking flexibility.
Trend 7: AI and Machine Learning Integration Into FP&A
Data, data, data. You’re managing mountains of it from finance, CRM, marketing, and every software tool in use. What’s the result? It’s difficult to connect the data across platforms and tell a cohesive story.
AI and machine learning can give finance teams an edge in connecting all the data, finding trends and insights.
⅓ of CFOs are already using AI in their finance process.
40% plan to tap into AI in 2024.
These are a few ways AI can enhance your FP&A projects in 2024 and beyond:
- Reduce the time spent culling through data and analyzing trends, by using AI features to summarize key insights for your reports.
- AI functionality can act as data hygiene filter to flag when source data is inconsistent or incorrect.
- Enterprise-level organizations can take the next step to use AI in a predictive learning function. This draws on their massive datasets and allows machine learning to make assumptions and predictions at lightning speed, which teams can leverage where desired.
- AI can also improve trend forecasting and scenario planning by making calculations based on a wide range of external and internal factors often overlooked by human analysts.
Adapt With Confidence Using an FP&A Platform
Have you found the best FP&A tool to meet the challenge of the moment?
Stratify is the FP&A platform that enables data-driven collaboration with business partners.
“Our passion is to help you to embrace the FP&A time flip. Imagine a month where 70% of your time goes to analysis and strategic storytelling, instead of 70% tedious data aggregation and report creation.”
Quy Dong, Director of Customer Success, Stratify.
With Stratify, you’ll have:
- Secure and accessible real-time reporting and analytics, giving you the competitive edge that larger enterprises enjoy.
- An efficient, collaborative, coordinated planning process, allowing for more time spent on strategy.
- A painless transition to more strategic finance, with native integrations and support from a dedicated FP&A expert to implement and customize your instance.
Get in touch for a personalized demo and a glimpse into your strategic FP&A future in 2024 and beyond.
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