It has long been said that cash is king and lack of it which brings a company down. So to forecast using just P&L figures restricts the ability to see the impact of one of the key threats to an organisations ability to hit their targets. We take a look at why so many models fail to pull cash into the plan and what you can do to fix this with a few simple steps.
No-one likes change, clinging to the status quo like a security blanket. We prefer the devil we know, to taking a leap into the unknown. This is just as true in the world of FP&A, maybe more so. So what is holding us back from making changes even when we know there’s a need, and what is the cost of doing nothing.
Shhhh! There are strange noises coming from the back room where the Finance team are being released from the shackles of Excel number crunching and liberated to planning constructively.
For many the sentiment above will resonate. Whilst we finance people love Excel and what we can do with it, we can all quote instances where inherent errors contained in spreadsheets were to blame for shocking financial error.
Three controls needed for accurate, agile control of your planning
On first observation, helicopters & Cash flow forecasting don’t appear to have a great deal in common. I am in the lucky position to have flown helicopters and I admit to a weakness for the speed, agility and control you get from a very simple set of controls. Ever since seeing those opening credits of Magnum (which I know ages me) showing T.C’s chopper swooping along the coast of Hawaii I wanted to fly one.
In the Finance world, there is a whole industry dedicated to producing and managing spreadsheets. We’ve all experienced the frustration of well meaning users adding extra lines in carefully crafted sheets, or hiding the guts of a complicated calculation away from prying eyes. We evolve and develop our spreadsheets to make it easy for the end user, and of course to keep the office hacker at bay. The best way to achieve this is to lock down the appropriate cells, and then use Protect Sheet and Protect Workbook with a nice secure password. Job done.