Articles & Alerts
What You Need to Know About Financial Planning and Analysis: Part 2 – Integrated Financial Planning (IFP)
As a follow-up to our Financial Planning and Analysis Alert Part 1: Planning and Budgeting, this alert provides additional information on Integrated Financial Planning (IFP) and how your company can benefit from it.
Financial Planning and Analysis (FP&A) is a critical activity that supports an organization’s financial health. Its solutions enhance the finance department’s ability to manage performance by linking corporate strategy to execution. It comprises four main activities: planning and budgeting, integrated financial planning, management and performance reporting, and forecasting and modeling. Of these, IFP is a crucial function that ensures the financial planning process is aligned with the company’s overall strategy and objectives.
To achieve this alignment, IFP involves stakeholders across all departments, including marketing, sales, customer service, operations, and more. This approach helps to ensure that the financial planning process is not siloed and that all stakeholders are aware of the company’s financial objectives and how they can contribute to achieving them. The involvement of stakeholders also helps to identify potential challenges and opportunities that can be factored into the financial planning process, leading to better decision making and, ultimately, success. Furthermore, performance reporting is an essential component of IFP. It involves collecting and analyzing data related to a project’s overall production process. Performance reporting helps stakeholders identify potential issues and informs them of the project’s status and forecasts, which involves determining the expectations of future results.
IFP is a continuous process that typically covers a period of three to five years and provides a framework for a business’s financial objectives. Budgeting specifics offer a comprehensive breakdown of the execution plan, encompassing elements like revenue, expenditures, potential cash flow, and the reduction of debt. With a clear understanding of the company’s financial objectives, stakeholders can make informed decisions aligned with the company’s overall strategy.
Using an effective tool like IFP can offer multiple benefits to businesses of all sizes. It can help to streamline and organize financial activities, making them more efficient and effective. As businesses grow and competition increases, financial planning becomes more complex and time-consuming, making integrated financial planning a critical aspect that requires careful attention to ensure accuracy.
Anchin’s Client Accounting Advisory Services (CAS) team is not just your traditional accountant; the CAS group is forward-thinking and works with businesses to achieve their goals. To learn more about the IFP process or how Anchin can help your business with integrated financial planning, please contact Anthony Carrella, Partner and Leader of Anchin’s CAS Group, or your Anchin Relationship Partner.