Why You Need Controls, Approvals, and Workflow in FP&A

Summary

In this edition, we will be covering the following items:

1. The problem with not having enough controls and workflow in FP&A

2. The problem with having the wrong controls and workflow in FP&A

3. How to get the right balance and how to implement efficient processes

What a Lack of FP&A Controls Looks Like

Many finance teams have painful, “disjointed” processes in place that leave the team more vulnerable to errors and key-person dependencies. Often, teams are reliant on a star performer (or two) to hold the whole team’s workflow together – the inefficiencies and points of failure are not apparent until those star performers leave.

1. Version Control and Source of Truth are Lacking: There are multiple versions of reports, budgets, forecasts in circulation and it is difficult to identify the latest or most accurate.

2. Cumbersome Approvals Process: Approvals are managed via back-and-forth email chains and the team needs to search through inbox or SharePoint to find files with the latest figures to assemble finalized outputs.

3. Status Tracking is Manual and Labor-Intensive: There is no systematic way to centrally track the status of reporting, budgeting, and forecasts by department or business unit. Tracking is done on a spreadsheet and with a constant stream of communication and coordination.

4. Non-Standardized Processes Across the Organization: Different departments and business units use different processes to generate reports, budgets, and forecasts. This makes it difficult to form a clear picture of the whole business, its performance, or its plans for the future.

What the Wrong FP&A Controls Looks Like

Other teams face the opposite problem. Restrictive and rigid controls prevent the team from doing their best work and constrain their productivity. These systems may be more robust, but they can lead to employee frustrations and lack of efficiency.

1. Rigid Processes Constrain Efficiency: Where processes are too convoluted and controls are too stringent, teams are impeded by the process. Team members spend time waiting for dependencies and approvals (“bottlenecks”) and are unable to deliver results efficiently.

2. Lack of Independence Throttles Innovation and Initiative: Star performers on the team are discouraged from taking the initiative to create change because they feel “trapped” by the processes they work with on a daily basis.

3. Lack of Clear Ownership: Unclear guidelines on accountability (responsibility) for each step of the process and who the appropriate authority is for escalation and approval.

4. Lack of Flexibility Causes Sub-Optimal Compromises: Teams across the organization are “forced” into using the same processes, without account for the individual needs of each department or operating unit.

What Successful FP&A Controls and Workflow Looks Like

The best teams have identified a middle ground that gives the team freedom to operate within simple, robust guardrails.

1. Automated Budgeting/Forecasting Kickoff: Managers are automatically notified of what to submit (budget, forecast, report) and when to submit it.

2. Role-Based Security: FP&A tools, built in Power BI, limit each manager’s ability to input and view data to their specific “domain” (department, team, or business unit).

3. Automated Approvals and Defined Ownership: Approval requests are automatically sent to the correct stakeholder with the authority to approve. Approvals are implemented directly in Power BI tooling when needed and, in other cases, a “trust but verify” approach is taken when appropriate.

4. Centralized Communication and Collaboration: Communication is centralized via commentary within a central Power BI dashboard. The team’s thought process and decisions are memorialized for future analysis.

5. Centralized Status Tracking and Automated Follow-Ups: The status of all planning and reporting is tracked in one dashboard and follow-ups are sent automatically for delinquent submissions. Once approved, the plans are locked for editing.

6. Calculated Flexibility Enables a “Trust But Verify” Approach: Processes are designed with the needs of each department and business unit in mind – offering enough standardization to streamline the organization, but enough flexibility to allow teams to solve for their own needs.

Implementing Your Ideal FP&A Workflow in Power BI

Power BI can be much more than a reporting and analytics tool. Leveraging a planning integration like Acterys can give you the ability to build in-house applications, completely tailored to your organization’s needs.

1. Centralize Reporting and Analytics in Power BI: Power BI is used for reporting and analytics across your team.

2. Augment with Configurable Driver-Based Planning via Acterys: Using Acterys, you can transform Power BI into a customizable planning application, incorporating any business logic your team needs.

3. Configure Automated Notifications, Approvals, and Controls: Power BI, Power Automate, and Acterys can be used to configure any workflow your team needs. They give your team the ability to set automated notifications, approvals, and controls – that are as strict or as unobtrusive as necessary.

4. Customize and Iterate Your Workflow as Needed: The value of Power BI (along with Acterys) is that it is an easy-to-use, in-house tool that your team can modify at your discretion. Modifying business logic can be done as the business evolves and your needs change.

The key takeaway is that there is much more to Power BI than “just” reporting. It can be used as a central platform for planning, budgeting, forecasting, reporting, and analytics. Used correctly, it can become the hub your team uses to implement streamlined processes, robust controls, and intuitive tooling to support your organization.

In the Next Newsletter

We will learn about the problems with an Excel-only approach to FP&A and why finance teams need to think carefully about tooling that evolves with their needs.