We do not assist our clients in just creating the plans and budget but creating the relevant plans and budget that can be used throughout the year in order to prevent upcoming problems and generate additional value by steering the whole organization toward the common goal.
Controlling functions that we build do not comprise of employees looking at some financial reports. We create the smart algorithms that monitor all relevant business transactions and changes and alert employees on all relevant anomalies.
In order for plans and budgets to be effective it is necessary that:
- initial plans are automatically generated by machine learning at the lowest level
- initial plans are adjusted by employees in charge at the high level of aggregation (store, product group, department, etc.)
- adjusted plans are again related to the lowest level by machine, not employee
- algorithm tracks changes every day on all levels
- algorithm alerts employees not when problem already happened but when is problem expected to happen in the future so employees have time to react and stop the loss
- employees have a tool that will tell them every day how far away are they from the target and what is their current bonus related to their performance
In order for controlling to be effective it is necessary that:
- company does not look at purely financial reports but financial reports based on actual events in the company (sales, stock, purchase, etc.)
- algorithm tracks anomalies in non-financial events and calculates their expected financial value i.e. importance
- anomalies are based on what will happened (forecast) and not accounting i.e. what happened. Why spend time on past when it cannot be changed?
- anomalies and problems are delivered to people that are responsible and can react in terms of business processes and not some controllers that will not take any value resulting actions
If you want to learn more about our 10+ years of helping our client create and use plans and budgets and successfully control their businesses, ask us about our success stories in planning, budgeting and controlling as well as how are we helping Profitbase, our partner in Norway to create automated smart budgeting platform.