The importance of planning, budgeting, and forecasting
When a company has strong planning, budgeting, and forecasting processes they are most likely to obtain accurate financial analytics and financial forecasts. In this scenario, a company benefits from a huge competitive advantage against other companies in the industry. When there is top-notch accuracy, a business operates with more accuracy. In return, a higher ROI is almost guaranteed. There is also the factor of possible market disruptions and shifting trends. Companies need to be able to pivot quickly therefore creating a flexible and effective plan is key to avoid falling behind other competitors.
These plans and financial targets are based on data, therefore it is a must that it is accurate for the creation of future plans.
When an organization embraces data and analytics when creating plans and forecasting reports there is an elevated component to strategic decision making that will, in turn, be rewarded with even better results and timely forecasts. The tools offered by an ERP system can save time, reduce errors, enhance collaboration and develop an overall more disciplined management system.
In more specific terms, a modern ERP like NetSuite can help companies to:
– Update and pivot plans and forecasts according to new threats and opportunities.
– Identify, analyze and predict the result of changes as they occur.
– Strengthen correlated plans such as operation and financial plans
– Predict and plan for better cash flows
In light of current times, the COVID-19 crisis showcases its effects on supply chains. Companies have now come to terms with how challenging it can be to plan and pivot supply planning when disruptive one-in-a-million events occur. In reality, less severe events occur often in which supply chains are undermined and legacy tools can no longer keep up with the task.