05 Oct 2021 Ankit Chadha

Unleashing the Potential and Power of Financial Planning and Analysis

Financial Planning and Analysis | TRC Corporate Consulting

Effective financial planning and analysis enhances an organization’s finance department's capacity to control the organization’s performance. Planning and budgeting, integrated financial planning, management and performance reporting, and, forecasting and modelling are the four tasks that support an organization's financial health during financial planning and analysis (FP&A).

Why is Financial Planning and Analysis Important? 

Financial planning and analysis backs up the company plan and lays out a procedure for ensuring that the primary goals and core objectives of the firm are attainable financially.

Ideally, financial planning and analysis focus on the future. The strategy is linked to a long-term plan as well as annual operational and capital budgets. The financial planning and analysis process gives direction to the finance department, ensuring that annual budget results are delivered and cash flow predictability is improved.

Consistency is vital, and a good financial planning and analysis process removes variation and provides consistent and trustworthy data, based on which you can make informed decisions. A well-run financial planning and analysis consultancy firm like, TRC Corporate Consultancy also creates and distributes exception reports, highlight reports, and other analytical reports (such as ratio analysis) to help the organization's leadership make better decisions.

Role of Financial Planning and Analysis 

The financial analysis and planning function is critical to a company's performance because it enables management to successfully manage cash flow, make the best use of resources, and plan efficiently to guarantee that the company's strategic goals are achieved.

Let’s see how financial planning and analysis works as an added advantage for a firm:

  • Using important financial statistics such as the debt to equity ratio, current ratio, and interest coverage ratio to assess the company's overall financial health.
  • Identifying which of the company's products or product lines contribute the most to net profit.
  • Identifying which items have the biggest (and which have the lowest) profit margins.
  • Examining and evaluating the cost-efficiency of each company department concerning the percentage of the company's financial resources that each department consumes
  • Collaborating with various departments to develop budgets and condense them into a single corporate budget.
  • Creating internal reports for upper management and assisting them in making decisions
  • Developing, updating, and maintaining accurate financial models and forecasts for the company's future activities.
  • Comparing past results to budgets and forecasts, as well as doing variance analysis to explain performance variations and create future improvements
  • Examining potential expansion or growth opportunities for the company.
  • Developing growth strategies that include capital expenditures and investments.
  • Creating financial estimates for the next three to five years.

Financial Planning and Analysis Process 

Financial planning and analysis is a comprehensive process. Planning, forecasting, budgeting, modelling, and scenario analysis require common, standardised business information. For financial analysis and planning, performance control, reporting strategic and operational results, standard scorecards and dashboards are used. To bring out accurate and reliable results, it would be advantageous to leverage services of expert professionals, who have been in the industry for a couple of years.

To mark a few basic steps of financial planning and analysis, here’s a list:

  • Recognize the goals of the report
  • Create a flow chart for your team's reporting.
  • Data should be collected and normalised, and information should be organised.
  • Make a solitary source of truth.
  • Real-time collaboration
  • Review, approval, and signature are all steps in the process.
  • Compile all the final reports are in one place.

Unleashing the Potential Power of Financial Analysis and Planning 

  1. Short and Long-Terms Plans 

Gather and prepare data for Profit & Loss statements for both short and long-term planning. Plan scenarios based on a variety of forecasting considering the losses and risks.

  1. Budgeting 

Make a budget for a specified period (typically one year). Monitor the plan's month-to-month implementation, including income and expenses, cash flow projections, and debt reduction. Adjust the plan if necessary.

  1. Management Accountability 

Compile budget, cash flow reports on a weekly, quarterly, and annual basis. Gather and analyse financial and operational data to gain insights that can help you make better decisions. Report the same to the accountable party/ person.

  1. Forecasting 

Using historical data, forecast financial performance over the following four to twelve quarters. For a rolling forecast, re-predict the next 12 months after each quarter.

  1. Ad-Hoc Reporting & Analysis 

Gather data quickly throughout the year for ad-hoc analysis and reporting. Based on your results, make management recommendations.

How Can TRC Corporate Consulting Help Your Organization in Effective Financial Planning and Analysis? 

Financial planning and analysis enables businesses for optimal resource allocation and enhances organisational understanding of the business strategy by outlining each stakeholder's involvement in its realisation. Many businesses, however, confront the difficulty of not having practical knowledge to support optimal financial analysis and planning, wherein, TRC Corporate Consulting’s unparalleled services prove to be useful. We help you with concrete ideas and best-practice principles that will help your company implement excellent financial planning and analysis.

Internal financial planning and analysis teams who completely rely on software to manage various financial planning and analysis processes face difficulty to keep up with their growing to-do list and changing norms. However, TRC Corporate Consulting’s financial analyst experts gather real-time data for offering planning and budgeting solutions, which enhances the value of the firm with prudent and credible results.

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