It is vitally important for organisations to develop the ability to sift through ‘big data’ and identify key financial areas of focus for integrated and effective planning, forecasting, budgeting, and decision-making to ensure not just their economic survival but to create the basis for future development and growth.
Effective planning and budgeting should aim to optimise the use of scarce resources. During periods of economic slow down, which are inevitable elements of boom and bust cycles, it is also crucial that every financial decision is value-adding – waste (and therefore cost), meaning anything that is not value-adding, should therefore be eliminated or at least minimised.
Managers employed in every function at all levels in the private, public and voluntary sectors, and in manufacturing and services, are expected to digest large amounts of financial information in order to and prepare plans and budgets, and make business decisions.
To carry out these tasks successfully it is important that both financial and non-financial professionals refresh and update their know-how and skills in the key areas of financial planning, forecasting and budgeting. The lack of appropriate knowledge and expertise exposes organisations to risk through a failure of managers to:
- Understand financial and economic indicators and read the warning signs
- Advise on appropriate actions and make correct decisions
- Prepare effective financial plans and budgets
- Eliminate waste and control overheads and other costs