PA’s Lars Paredes discusses how CFOs should consider implementing a smoother budget process as finance departments evaluate their performance towards the end of the year.
Lars writes: “Far too many companies spend too much time on traditional budget planning and too little time on creating a link between the planning process and the budget process. The budget processes are often done without a visible link to corporate strategy […] but it is possible for the CFO to create a better coherence between the financial objectives and those of the business.”
According to Lars, CFOs and the finance departments are great at planning concrete activities and creating KPIs; however, in far too many companies the CFO’s role is passive. This means that when scheduled activities change throughout the year, there is no link to the financial consequences.
Lars writes: “The finance department should contribute to establishing the strategic initiatives. They must be able to advise the management and deliver intelligence and analysis that support management in making future decisions.”
Lars Paredes is business transformation expert at PA Consulting Group