Payroll Forecast

Forecasting is always an essential part of any business, and the workforce is typically the largest expense. 

Workforce planning includes salaries, commissions, benefits, taxes, retirement, and much more.  On average, workforce expenses comprises over 30% of gross sales, but it can be over 50% depending on the industry.  Workforce forecasting should always be the top priority for any organization.  Our guide will cover many alignments with strategies, access to data, and best practices on workforce planning and forecasting.

How to Develop a Strategic Plan for Workforce Forecasting

There are many questions to ask prior to starting any type of forecasting, and workforce-related items are often some of the most central questions.  Companies will not be able to forecast reductions, increases, or changes accurately for the workforce without a strategic plan. Data varies, but the estimation is that approximately 90% of all organizations fail to execute their strategies successfully.  

There are many reasons for the failure and it includes lack of communication, not linking strategy to planning, top down approach only, and failed implementation strategy.  Ensure that the organization has a clear strategy and communicate it clearly to the company that there is a well-defined execution path.  

Access to Data for Workforce Planning

The ability to access accurate and timely data for analysis is a necessity.  The data must be accessible in order to build workforce demand forecasting models. There can be a lot of data and below is an example of some of the data by employee by month that would be beneficial in creating a model:

  • Salary
  • Commissions
  • Bonuses
  • Promotions
  • Taxes
  • Benefits
  • New Hires
  • Title
  • Terminations
  • Overtime
  • Headcount by Position
  • Hours Worked
  • Benefit Eligibility

The first question to ask is whether you can access the data.  Determine where the data is coming from and create a process to integrate the data so there is a seamless process monthly or quarterly depending on how often forecasting happens.  

Spot check the data to ensure that the data is accurate as workforce accounts for over 30% of expenses, so a small variance can have a large impact.  For example, if a benefit comprised 1% of gross revenue of $100 Million and the assumption was off by 50%, then the variance would be approximately $500,000 for a single benefit.  This is a substantial variance for just one benefit, which can affect decision-making.   

Generally, workforce demand forecasting models are the most complex templates that organizations have.  The more accurate the data is, then the less complex the models need to be and many of the assumptions go away.  A model allows for enabling quick and accurate decision-making for managers and executives around changes that may need to happen.  They can quickly create multiple what-if scenarios that provide the foundation for the best decision making possible.

How to Forecast Change in the Workforce

There are many ways to go through planning for changes in the workforce.  First, as stated above, set a strategy to provide everyone using the model the clarity to make decisions that meet the strategic plans.  

If management expects production to increase by 50% in manufacturing, then typically there would need to be an increase in workforce or a plan about using more robotics, which may decrease workforce to meet the demand.  However, without this information, the accuracy of the plan will not be accurate.

Decide whether to use a top-down, a bottom-up, or a hybrid of the two approaches.  A top-down approach is when senior management determines the plan and pushes it down to the rest of the company.  A bottom-up approach is when line managers plan and then it rolls up to a consolidated plan.  A hybrid is using both methods and then comparing as different versions. 

Executives can provide a top-down version as a guideline for the managers.  The key to a top-down approach is a model that provides quick what-if scenarios based on adding new hires, modifying benefits, or terminating a percentage of the workforce as an example.

The bottom-up approach typically has two methods and uses the approach that best fits your organization.  One way is to forecast at the employee level.  Managers would go in and enter in new hires, possibly terminations, raises, overtime, and any benefits that a manager would have information on.  This method is very accurate but may have flaws if there is a lot of turnover.  The second method is to plan by headcount by position.  This method would list a job title and how much headcount along with an average salary.  This is not as accurate as it uses an average salary, but works for large organizations that have many people in similar positions. 

Finally, it is important to understand how the organization has been in the past regarding their workforce.  Ask questions such as the following:

  • Is the organization good at hiring or firing?
  • Does it hire too early or too late?
  • Does it usually run a very lean organization or does it get too large?
  • Do certain departments get more budget than other departments?

Understanding this information is vital as it should be included in the plan.

 

The image below offers an example of a partial forecast form where a user can enter a goal, make changes, and see real time changes.

Payroll Forecast

Workforce Forecast – Reporting Process

Reporting is the last step and this comes down to two main parts.  

First, have reports to determine the variances of the workforce forecast against the actual by department.  Next, analyze and document the variances.  Determine if the variances were due to assumptions being incorrect and then modify the model so that it can be more accurate going forward.  If the variances are due to changes in decisions, then document it so that it can be accessible in the future, in case questions come up.

Second, determine the workforce metrics that are important for the organization.  Below are some metrics that may be useful:

  • Revenue/Employee: tracks productivity of the organization over time.
  • Employee Turnover: number of terminations divided by average number of employees.  Note modify to separate out voluntary and involuntary terminations.
  • Benefits Cost/Employee: determine trend by dividing all benefits by employee.  A variation is dividing this by total payroll.
  • Overtime Percentage: overtime divided by total payroll.
  • Time Since Last Promotion: average time in months since last promotion.  This can signify an issue if many top employees are leaving.
  • Time to Hire: the number of days it takes from posting a position to signing the offer letter on average.
  • Engagement: use a survey to ask questions of employees annually and compare over time.

 

This dashboard example is provided by Microsoft shows visual workforce analysis – https://docs.microsoft.com/en-us/power-bi/sample-human-resources

Solver offers an array of workforce demand forecasting models to help set you up for success. You can review some examples in the images below.

Human Resources Dashboard

Contact Solver to Learn More about Workforce Forecasting 

Workforce forecasting is an imperative function for all organizations and it all starts with a good strategic plan. After that is complete and communicated, then provide data access and create models that can enable world-class decisions. Finally, analyze the reports, review the metrics, and make changes based on the analysis.

Our team at Solver can help set you up for workforce planning and forecasting success. Contact our team today or request a demo for more information about our corporate performance management tools.

liquidityriskanalysis

Nobody likes a budget that is far off target, especially when it could result in a liquidity crisis. Luckily, most companies rarely have to experience such a stressful event. Although, in a turbulent economy where interest rates and stock indexes move up and down like yo-yos and news about corporate layoffs are part of daily news headlines, strong financial clarity does not seem like a bad idea.

So, what does a cash flow forecast mean to most people?

Here is a definition: A cash flow forecast is a plan that shows how much money a business expects to receive in, and pay out, over a given period of time. 

Based on the definition above, it seems logical that all businesses should have a cash flow forecast perfectly ingrained in their corporate processes, but is that the reality? Let’s take a closer look at this.

Are All Businesses Doing Cash Flow Forecasting?

As much as it seems to make perfect sense to have a good estimate of your future cash outflows and inflows, many companies never get around to doing it. This is especially true in small and mid-sized businesses. Some of the reasons for the lack of cash flow forecasting models are the following:

  • The finance staff don’t have time to prepare it
  • Lack of tools that automate cash flow forecasting
  • Complexity in creating a good cash flow model
  • Lack of accuracy in past models leading to reduced appetite to repeat it
  • Other business tasks or fires keep executives focused in other areas
  • The financial planning team is exhausted after then annual budget process with no time or motivation to re-forecast the budget during the year

Regardless of the reason for not doing a cash flow forecast, healthy cash flow is the lifeblood of all businesses, so there is no lack of motivation.

Let’s look at the potential benefits of accurate cash flow forecasting.

Why Do Companies Want to Project Their Future Cash Outflows and Inflows?

Most executives know they would sleep better at night if they had a mechanism that fairly accurately could tell them if the liquidity of their business is healthy or not in the months ahead.

Below is an example of a report using simple color indicators and charts to help managers analyze the company’s projected cash position based on underlying cash flow forecast.

liquidity risk analysis

There are several very logical reasons why a company can benefit from regular cash flow forecasts, including:

  1. Reduce the risk of insolvency – by having a clear idea of any upcoming liquidity issues, management can react early and avoid drama and stress
  2. Move faster on investment opportunities – if you, thanks to a cash flow forecast, early on know that the business will be flush with cash in the months ahead, you can start planning acquisitions, down payment of high interest debt, purchases of strategic capital assets, etc.
  3. Satisfy bankers to enable debt financing or other bank-backed financial transactions

In other words, solid cash flow forecasts can be of tremendous value to a management team. However, if many financial teams dread the additional work of doing planning and performing a cash flow analysis, how can companies still get it done?

How to Automate Cash Flow Forecasts?

As in many other cases, technology can help automate laborious tasks. In the case of cash flow forecasting, there is a cloud software category often referred to as Corporate Performance Management (CPM) solutions that includes vendors such as Adaptive Insights, Centage and Solver that specialize in planning, budgeting and forecasting.

Benefits of CPM tools include scenario forecasting to predict “great”, “good” and “bad” scenarios so managers can plan accordingly. In other cases, CPM solutions provide entire driver-based forecast processes. Driver-based means that the forecast includes assumptions that help automate and simplify creation of sales, payroll, expenses, balance sheet and cash flow forecasts.

Sometimes managers don’t have the time or the need for a full forecast to analyze projected liquidity, in which case they can use simulation models to quickly adjust elements of their cash outflows and inflows to see the impact on the cash position as seen in this example:

cashflowanalysis

Most executives would agree that accurate cash flow forecasts provide numerous benefits to their business. During economic turmoil cash flow forecasts can help lower the risk of running into liquidity problems and increasing the chance to be ready to jump on investment opportunities. Regardless of the motivation, there are good tools available to help automate and simplify such financial planning processes.

At Solver, we offer Corporate Performance Management Solutions that help you establish cash flow forecasts and analyses and prepare for uncertain times. Contact one of our expert team members to learn how we can help you improve your cash flow processes.

Contact Us Today

blog image for corporate performance management during COVID-19

As we all struggle to adjust to our new reality of social distancing and general economic uncertainty, it seems as if our expectations for the future are changing day-by-day, if not hour-by-hour.

It is hard to tell what next week will be like for businesses across the world, much less what next month will look like – or six months from now. However, with a good Corporate Performance Management (CPM) solution, your company can gain insight into a range of possible future scenarios, so you can start executing meaningful action items right now.

With the right CPM in your toolbox, you can get fast answers to pressing COVID-related questions, such as:

  • How will it impact my business if I let some employees go? 
  • What can I expect for cash flow, as things stand now? 
  • Which expenses should I cut – now and later?
  • Who are the customers that are slow to pay? 
  • What is the best case scenario of COVID on my business… and the worst?

If you are not sure how to find those answers with your CPM, or if you are not sure whether your current system provides this critical information, this article will help.

What Are the Two Essential Capabilities of Corporate Performance Management During COVID-19?

If you already have and use a world-class Corporate Performance Management system such as Solver, Adaptive Insights, or Prophix, you can breathe easy. You already have access to the tools you will need to answer your COVID-related questions.

Those tools are:

1. Forecasting

Due to the ever-changing nature of the COVID-19 pandemic, nearly every company across the planet is having to throw out and replace their 2020 budgets right now. Forecasting on the fly can be difficult if you are working from spreadsheets but, with a highly effective CPM solution, you will have the freedom to run new forecasts for every twist and turn as the coronavirus situation unfolds.

Some of the best forecasts to run include:

  • Payroll modelling / forecasting

As a business leader, you already understand that it is possible you may have to let a few employees go or do a temporary salary cut before we all return to “business as usual.” This forecast helps you clearly identify the effect of your staffing strategy, so you can be more confident that you are making the right choice.

  • Sales modelling / forecasting

Perhaps you are not looking at staff reductions. Essential industries such as healthcare or food and health manufacturing are experiencing a steep rise in sales as a result of the coronavirus. However, whether your sales are on the rise or your company is facing a temporary slowdown, it is critical that you have accurate, timely insight into what you can expect for sales and revenues in 2020.

  • P&L, Balance Sheet, and Cash Flow forecasting

It is always a good business practice to keep a close watch on your P&Ls and Balance Sheets to make sure your financials are in order. With the abrupt market shifts we are all seeing right now, it is more important than ever to closely oversee changes in your operating, investing, and financing cash flows as you update your strategy.

2. Reporting

In an emergency, it can be difficult to sort through the sea of reports available to you from a Corporate Performance Management solution, so here is your quick guide to the essential reports you will need right now.

  • Multiple forecast versions compared

Gain insight into your organization’s best-case scenarios, worst-case scenarios, and everything in between using this easy-to-understand comparison report that maximizes your forecasting vision.

Actuals vs. Budgets are handy when your budget fits a predicted scenario, but we think it is safe to guess that your budgets do not quite match up with your reality right now. This report replaces your budgets with forecasts, so you can perform a more accurate actual vs. “budget” comparison that is based on the most up-to-date data.

  • Reports focused on vendor and payroll expenses

It may be time to cut expenses soon, so knowing which of your expenses are “expendable” may be critical information for your company. This report gives you the numbers you need, so you are prepared to cut back if and when that is required.

  • Customer aging receivables

Right now, every company across the world is anxious about the future and rethinking their expenditures – including your clients. By using reports focused on customer aging receivables, you will get quick and accurate insight into which of your customers or clients are late to pay, so you can check in instantly.

Not Using a CPM Solution Yet? There Is Still Time.  

If you are relying on unwieldy spreadsheets or the limited reporting options included with your ERP, you are probably frustrated at the lack of insight you have.

In truth, lack of insight can be a big problem for companies right now, considering how quickly the economic landscape situation is changing. If you are ready to get accurate, up-to-date financial and operational data at your fingertips, including easy-to-read KPI dashboards, planning tools, and a secure data warehouse to house all your data, now is the right time to get your Corporate Performance Management solution set up.

Setting up a modern CPM solution is easier than ever, but you will still need to make sure you choose the right solution for your needs. Though you have a wide range of strong CPM solutions available to your company, your ideal solution will depend on your unique business setup, size, industry, integration needs, and objectives.

However, to make sure your CPM system meets your precise needs during the coronavirus situation and beyond, you will want to ensure you choose a CPM that fits these requirements:

  • Cloud-based solution

If your workforce is largely working from home (WFH) for the duration, now will not be the right time to deploy or support an on-premises / in-office server solution. A cloud-based CPM is more convenient to implement and support during a disruption, and it is also more convenient to access for consultants working from home.

  • Rapid deployment

A CPM that takes months to deploy will not help you solve the situation right here and now. Cloud-based solutions are faster and easier to deploy than on-premises solutions, and CPMs that include pre-built vendor report and forecast templates will get you analyzing your evolving numbers the same day your solution goes live, so you can answer your critical questions instantly.

Learn More About Your Options for Corporate Performance Management

If chosen carefully, effective, cloud-based CPMs can help you maintain your agility with quick decision-making during the coronavirus or any other unexpected setback.

Ready for some advice that will help you determine which CPM is right for you? We can help.

Since 1996, the global team of CPM experts at Solver have helped companies like yours successfully navigate the rapidly changing business landscapes that define our modern, global commerce world. We are happy to share our expertise with you, so you can find your path through this unexpected and unprecedented worldwide situation.

Truly, you can ask us anything about CPM. We promise you a careful, well-reasoned answer that makes sense for your exact needs. (We do not like one-size-fits-all answers, and we suspect you do not like them either.)

 

We guarantee that when you contact Solver, you will get the guidance and help you need to understand all your CPM options, so you can confidently move your business forward in all situations, including right now.

Ask Solver a Question.

 

hybrid cloud

There are more than 200,000 companies running on-premise ERP systems from Microsoft, Sage, SAP and Acumatica world-wide and many are not planning to move to the cloud yet. However, if you are one of them, this does not mean that your company can’t start taking advantage of modern cloud-based reporting solutions today to drive better and faster decisions for yourself and your management team!

Hasn’t Cloud-based reporting for on-premise ERPs been available for a long time?

Yes, vendors like Prophix, Solver, Vena, Adaptive Insights, and Planful (formerly Host Analytics) have offered both cloud-based financial reporting and budgeting for years. However, all of these vendors have typical corporate performance management (CPM) architectures that require data to be loaded from the on-premise ERP and into the cloud CPM tool before the user can run reports. 

The process requires a “refresh” of data from the ERP database into the CPM database which means that the data users see in reports is not real-time. This also mean that the drill-down on any number is only as detailed as the lowest level data that was loaded into the cloud CPM database. 

Your executives are often ok with this because they want to wait on their report analysis until the accounting team has closed the books. However, the accounting team that is posting transactions in the ERP system almost always prefers live ERP reporting because they want to immediately see the impact of journal entries in their reports. They don’t want to refresh data into a CPM reporting database first, and then wait one minute, ten minutes or significantly longer to run reports after the data has been transferred to the CPM tool.

How do I get true live reporting for my on-premise ERP GP data?  

The obvious answer is that you use the report writer that natively comes with your ERP system such as  Management Reporter, GP Report Writer, Smartlist or SQL Reporting Services (SSRS). However, at best, it would be safe to say that these tools have aged “gracefully,” and they are just not comparable to many modern cloud reporting tools.

Key weaknesses of on-premise report tools include:

  • Not particularly user-friendly for accounting staff to design reports.
  • Lack of easy and professional formatting.
  • Typically requires VPN or Terminal Server to connect to the ERP in order to run reports from outside the office network.
  • Maintaining multiple report writers for different data (e.g. for formatted financial statements versus sub-ledger transaction reports).

In order to overcome these weaknesses and help on-premise ERP customers maximize the value of their data a modern, cloud-based reporting platform, Solver has now launched what they refer to as “Hybrid Cloud Reporting.” You can see it live in this video. This is a unique integration technology that enables you to:

  • Use your web-browser to run beautifully formatted reports (looks like Excel formatting).
  • Benefit from true real-time reports on your ERP data without any data transfer to a separate reporting database.
  • Drill-down from any number in the report directly into your underlying GP transactional data. 
  • Easy internet and browser-based access with no need for VPN, or software like Terminal Server.
  • Enter budgets from user-friendly forms (looks like Excel) in the cloud and have the transactions stored directly into the GL budget table in the ERP database.
  • Be better prepared to move to a cloud ERP later because the reporting and budgeting solution is already in the cloud. 

In other words, now your accountants and reporting end-users get the best of two worlds by only needing a web browser to run live ERP reports and drill-down.

Below is a simple architecture diagram to explain how it works:

hybriddiagram

What about budgeting and forecasting?

Like many other cloud-based CPM solutions, Solver also offers budgeting and forecasting. With the new Hybrid Cloud technology and Solver’s cloud-based Planning Module, users can store budget data directly back from Solver’s budget forms in the cloud, into the General Ledger budget table in the ERP database. 

So, if you struggle with manual Excel-based spreadsheets for your budgets, you can save a lot of time by eliminating emailing files between users, linking between spreadsheets, and put better controls in place for the entire budget process with workflow and approvals. 

As an example, users can access budget forms like the example below with their browser and instantly, until you close the budget process, update their department’s budget in the ERP system. Since Solver’s Hybrid Cloud updates are real-time, reports can immediately be run to see the impact of these changes on the budget.

Enjoy Faster and Better Decisions in the 2020s

Companies like Solver, Prophix, Vena, Adaptive Insights, and Planful are driving the next generation cloud-based reporting and planning technology. However, with the lack of live reporting and live budget write-back to on-premise ERP systems, accountants and very active ERP users have been left with their legacy tools for their real-time reporting needs.  

With the release of Solver Hybrid Cloud, these users now get the best of both worlds and can start ushering in the 2020’s by enabling themselves and other users with faster and better decisions.  Learn more about the benefits of choosing Solver CPM solutions by contacting us today or requesting a demo. 

Supported ERP systems are: Microsoft Dynamics GP, SL, and NAV, Sage 100 (SQL)*, 300* and 500*, SAP Business One (SQL)*, and Acumatica*.

*) Direct budget writeback not offered for these ERPs.

 

sage-intacct

If you have surveyed an audience of mid-market accounting and finance professionals, you almost always find that 90-95% primarily rely on manual budget models in Excel. How is this possible when most enterprise resource planning (ERP) systems, including Sage Intacct, have both basic native ERP budget functionalities? In some cases, they also have specialized add-on modules. For example, the Microsoft Dynamics on-premise ERPs had the now “retired” Forecaster product and for Sage, it is the Sage Budgeting and Planning. Other ERP systems have built various Excel export and import mechanisms to make it easier for users to budget in Excel. Then, re-import the GL portion of the budget.

While most ERP vendor’s budget add-ons do the job better then entering budgets directly into the ERP system, there still seems to be a large group of companies that simply need a full-featured budgeting and forecasting solution to get the workflow, formula and layout flexibility they need. These solutions are typically referred to as Corporate Performance Management (CPM) tools. They also include a reporting and consolidation functionality.

How do I know if my planning process is NOT streamlined?

Typically, there are a number of key motivators when an organization begins to look for a CPM solution to improve its planning process:

  • Effort spent exporting and importing data from Sage Intacct to home grown Excel budgets
  • Current process is error-prone and a resource strain on the finance team
  • Lack of time and resources to quickly re-forecast (for example if a virus hits the economy!)
  • Lack of automation to create many budget versions
  • Current tool too complex for staff to learn so ended up back with a manual Excel model
  • Find that the ROI of automation with a CPM tool is higher than the cost of manual processes

Which benefits should I expect from modern CPM Planning tool?

Because Sage Intacct is a cloud-based ERP system, pretty much all customers looking for a full featured CPM solution like Solver, Adaptive Insight or Anaplan, will also expect a high degree of functionality, including:

  • Cloud-based platform
  • Pre-integration to Sage Intacct and Sage Intacct approval as a certified add-on vendor
  • Complete workflow functionality to manage submissions, reviews and approvals of the budget
  • Highly flexibly budget form design to completely replace the company’s manual Excel models
  • Strong native report writer for variance reporting and budget consolidations
  • User administration and security that allow for any person to participate in the budget regardless if they are users of Sage Intacct or not
  • Usability features like spreading, break-back, lien items with comments, and more.

I am planning to implement Sage Intacct. What is the best timing for budgeting tool?

Accounting teams always have a lot on their plate. Therefore, it never seems to be a great time to implement another software. However, the best time seems to be in the 2-3 months after the most recent budget cycle. Not only will issues and needs be fresh in mind, but it also allows for plenty of time to select, implement and test a new planning solution before the next budget cycle starts. Some organizations even do a “dry run” of their new budget solution during the year for one of their forecasts.

Carefully selecting a CPM vendor is important

Turbulent Mergers & Acquisition (M&A) market

For example, when a vendor gets acquired, it usually ends less than good for customers. The most typical reason that issues arise is that acquiring companies are much larger than the target company. Therefore, politics and other internal priorities at the parent company tend to drive employees away, disturb the focus of product development, increase prices and more.

Eventually, many acquired products die slowly, and customers end up switching products and vendors. Comshare, Adaytum, SRC Software and Clarity are a few vendors that suffered this during the M&A spree that took place in the CPM space about 15-20 years ago. Over the past 3 years, another wave of M&A has happened, including Workday acquiring Adaptive Insight, a PE firm acquiring Host Analytics from its old investor, Wolters Kluwer acquired Tagetik, and PE-owned Insight Software acquiring Jet Global, Atlas, BizNet and other players in the game.

Protecting the significant financial investment

There are more CPM solutions that are cloud-based. Customers can sign up for one or more years of subscription versus having to purchase the software upfront. However, even if a subscription is reasonable, the amount of time and effort from the internal staff (often with the help of costly consultants) has to be put in to get a CPM solution fully up and running. Also the reports, budget model and dashboards that management need are very significant. You can expect anywhere from twenty thousand dollars and to several hundred and thousands of dollars in direct and indirect costs for full blown implementations. In other words, picking the right vendor and the right product carries a much larger costs than simply a year’s worth of subscription.

Protecting your job

While a good vendor selection and successful implementation can be a significant boon to the careers of project management, it can be the opposite if it all does not work out well. Let alone the stress and long hours that often come from enterprise software implementations,  should it not end well,  can be a scar that follows you for a long time in your career.

Be Strategic

Whether there is too much pain from spreadsheet budgeting or a tactical hint for competitive advantages with faster and better decision-making that drives your search for a CPM solution, a final piece of advice is to be strategic about it. Don’t look at a CPM solution as a temporary band-aid, but view this technology for what it can be when properly chosen and implemented with care. One of your most important decision-making tools that can help drive growth and success for your organization in the 2020s.

The terms Corporate Performance Management (CPM) and Enterprise Performance Management (EPM) are often used interchangeably. These two forms of performance management software help businesses manage their resources and stay on track with their financial goals. Many argue that when you’re running a large organization, you need both EPM and CPM. Some solutions like Solver and Anaplan, combines functionality from both categories into a single solution.

There are two important differences between CPM and EPM:

  • CPM focuses specifically on providing a corporate-wide application of performance management, primarily for the organization’s finance department.
  • EPM focuses more broadly on the performance of the entire enterprise, extending beyond the finance departments to sales, marketing, supply chain and more.

If you’re comparing CPM vs. EPM, the choice may seem arbitrary given the similarities. While there is crossover between the functions of CPM and EPM software, CPM takes more of a financial focus, whereas EPM focuses more holistically on the performance factors of the entire organization.

What Is CPM Software?

CPM covers the following basic business processes:

  • Consolidation: Close management and consolidation of an organization’s finances.
  • Planning: Major areas of financial planning, including budgeting and forecasting.
  • Analytics and reporting: Gathering and reporting data from all applicable areas in an organization.

CPM software’s ultimate goal is to help organizations strategize and execute informed plans to reach their financial goals. In this way, EPM software and CPM software are alike. The primary distinguishing factor is that CPM offers advanced applications designed to drive the organization’s goal of increasing profits for itself and its shareholders.

With CPM’s more financially focused approach to managing a business’s performance, organizations can more efficiently track financial progress and perform tasks related to strategic financial planning. CPM enables business leaders to make more informed, data-based decisions to reach their organization’s financial goals and objectives.

Uses of CPM Software

CPM software is best used for performance management in the following scenarios:

  • Specialized performance management processes: With CPM software, you can apply more specialized performance management tactics to your financial planning strategies. CPM software is designed to focus specifically on driving a business’s financial goals and increasing shareholders’ profits.
  • Financial performance data management: CPM software tracks key performance indicators (KPIs) like an organization’s operational costs and other expenditures, revenue, return on investment (ROI) and other applicable data sources. With CPM software, accessing and analyzing an organization’s financial performance is easier than ever.
  • In-depth analytics: CPM software allows business leaders and financial departments to accurately analyze past and current data to make more informed decisions about the direction of their organization. Detailed analytic information is key in financial strategy and planning, and CPM software consolidates financial data into one easily accessible place.
  • Convenient and efficient financial management: With all of your financial data in a central location, managing your business’s financial performance can be done with extreme precision and efficiency with CPM software.

What Is EPM Software?

EPM software performs many of the same functions as CPM software. The primary difference is that while CPM hones in on a business’s financial data and management, EPM takes a broader look at multiple line-of-business operations and analyzes KPIs from each.

Many organizations prefer EPM’s more holistic approach to performance management across the enterprise compared to CPM. For many businesses, all departments play an equally important role in determining the organization’s financial outcomes. While CPM focuses on one area of the entire enterprise (namely finance), EPM considers every applicable department in the processes of consolidation, planning, reporting and analytics.

Uses of EPM Software

Many companies use EPM and CPM software interchangeably. Focusing on EPM’s unique advantages for your organization alongside a CPM system can be a worthwhile investment, especially if you have a particularly large organization.

EPM software is best used for the following processes:

  • A broad look at enterprise performance: EPM software’s purpose is to manage all performance factors across an enterprise, not just the finance department. EPM is a useful tool to provide business leaders with a clear picture of how different parts of the enterprise are performing individually and working together.
  • A bird’s eye view of business analytics: EPM software looks at analytics from virtually every part of an enterprise and tracks the KPIs of multiple departments at once. With EPM, you get a summary of your entire company’s performance due to advanced analytics technology.
  • Large-scale planning: With EPM, budgeting, forecasting and related planning activities are much more efficient and scalable. Creating annual operating plans is easy with the right EPM software on your side.
  • Versatile applications: While CPM software caters to the structure of corporate organizations, EPM software can be used for a wide range of non-corporate organizations as well. EPM can easily accommodate the performance management and planning needs of organizations in the government, education, non-profit and other sectors.
  • Saved time and energy: As with CPM, EPM software saves organizations time, energy and money when properly applied to business processes. With the ability to capture company data automatically from multiple departments at once and consolidate it into a central hub, employees no longer need to spend hours performing these processes manually.

EPM software’s broad organizational focus includes monitoring financial performance, but it does not focus exclusively on finance, as does CPM software. Individual software systems vary in the benefits they offer, and organizations should weigh their options carefully before committing to an EPM or CPM system.

Learn More About Solver Corporate Performance Management Software

EPM and CPM software offer many advantages to executives and financial managers looking to maximize decision-making capabilities in a competitive marketplace. Solver is an easy-to-use and innovative CPM solution that is built for the ever-changing demands of growth-focused companies. Using a single, cloud-based solution, Solver automates reporting, consolidations, forecasting and budgeting processes for complete insight into your business.

At Solver, we can help you decide what your business needs based on your current metrics and financial goals. Submit a sales inquiry or request a demo, and a member of our expert team will reach out to you shortly.

While mid-market and enterprise resource planning (ERP) vendors offer native financial consolidation software, their limitations often leave users still in search of a solution that can produce.

Here are a few reasons why it has been difficult for ERP vendors to deliver the financial consolidation functionality inside the ERPs itself.

Common Limitations in Current Financial Consolidation ERPs

  • Problematic to consolidate across subsidiaries with different ERPs
  • Clunky consolidation process with too many steps
  • Manual consolidation adjustments, which can be tedious to post
  • Inability to handle different chart of accounts
  • Weak auto-elimination functionality
  • Limited currency conversion functionality
  • Weak financial report writer to produce the consolidated reports
  • Lack of dynamic pro-forma consolidations
  • Inability to consolidate across subsidiaries with different fiscal calendars

Overall, consolidating within your ERP system remains a clunky process with too many steps. As a result, an organization’s finance team ends up carrying out the process in Excel, where they are likely comfortable using formulas.

Your ERP’s Current Consolidation Solution

Even with many popular ERP systems such as Microsoft’s Dynamics 365 Finance and Operations (D365 FO), SAP, Oracle or Workday, customers with significant consolidations and related financial reporting needs often end up depending on Excel, especially in the final steps of the process.

While ERP systems typically contain many consolidation features, and might even have a native Management Reporter that is an above-the-average report writer, it is increasingly normal that customers add on a “best-of-breed” corporate performance management (CPM) solution to simplify their financial consolidation and reporting software.

Modern cloud-based CPM solutions

Solver is an example of a CPM solution that comes with several added advantages, especially for Microsoft customers.

Advantages of Solver CPM for Financial Consolidation

  • Solution is cloud-based Azure
  • It’s configurable to general ledgers as well as sub-ledgers
  • It has a pre-built connector to Power BI for visualization

PowerBI_Dashboard_01

 

Some cloud-based CPM vendors like Solver now also offer an Excel add-in to give power users more flexible and familiar report design.  Additionally, in some CPM solutions, end users can still run the same reports in the cloud using their web browsers. They could do the same using their local Excel on the desktop connected to the CPM database in the cloud.

Additionally, modern cloud-based CPM solutions typically house advanced budgeting and workflow capabilities. This allows for a single solution and a single report/form designer for financial reporting, consolidations and budgeting.

Upgrade Your ERP System With Solver

To learn more about how modern CPM solutions integrate with popular ERP systems like D365 F&O and Business Central, Sage Intacct, SAP and Accumatica, click here.

financial planning analysis blog

The rapid growth of Microsoft’s Dynamics 365 Business Central (D365 BC) cloud ERP system comes with investments in add-on app solutions by independent software vendors (ISVs)For example, Progressus is a company as described above and has a project solution for D365 BC. With Progressus, small and mid-sized companies receive easy-to-configure and advanced project accounting functionality in the cloud. 

However, as all project-centric business managers know, good transactional systems also need proper financial planning and analysis tools. In today’s highly competitive market, this can be the difference between success and failure.  As successful project-based companies invest in new cloud-based ERP systems like D365 BC and add advanced project apps like Progressus, a natural next step after the implementation is to look for an integrated and flexible reporting and planning solutionA reporting and planning software like Solver can operate down to the detailed field and dimension level in the Progressus tables inside the ERP system.  

Project Reports for D365 and the Progressus App

Lately, most companies prefer pre-integrated solutions. Due to this, Solver partnered with Progressus and now the corporate performance management solution delivers an out-of-the box integration to both Dynamics 365 Business Central and Progressus. Solver not only provides D365 BC customers with a strong financial reporting and budgeting software for general ledger and sub-ledger data, but it also now extends this functionality into all the project detail provided by Progressus. 

Customer Benefits:

  • Pre-built integration to Dynamics 365 and Progressus tables
  • Pre-built Progressus Project reports
  • Full report writer with Excel design
  • Optional Budgeting module
  • Multi-tenant Azure Cloud Platform
  • Pre-built Power BI integration for interactive Dashboards

However, as with any reporting solution, pre-built report templates speed up deployment when can be used as a starting point. 

Solver offers a number of project-focused reports for Progressus including:  

  • Benchmarking
  • Project Manager Benchmarking
  • Project Capacity by
    • Customer Group and Resource
    • Department and Resource
    • Customer Group and Resource
  • Project Detail by Customer
  • Project List
  • Resource Detail
  • Actual vs Budget Variance

 

project capacity

project 2

Both solutions are independently integrated to Microsoft Dynamics 365 Business Central. After the partnership between the two companies, they decided to configure a joint integration. With the rapid growth in popularity of cloud ERP software like D365 BC, one of the next big cloud drivers is that ISVs, such as Progressus and Solver, work together to give customers elegant integrations across both standard ERP data as well as transactions originating from ISV add-ins to the ERP systems. This eliminates many of the custom integrations that are configured in the old on-premise platforms.

Technology is driving major industry changes into the next decade. Project managers and executives will need and demand complete insight to their data to drive faster and better decisions. Cloud-based ERP vendors and ISVs are making good strides to make this happen!

When you’re managing a large hotel or resort, your day-to-day job requires you to juggle countless moving pieces. From tracking KPIs to producing financial reports, running a sizeable hotel or resort is practically impossible today without the help of advanced hotel performance management software. Fortunately, there are many solutions on the market designed to accommodate the unique needs of the hospitality industry.

When you’re dealing with guests, hotel staff, changing rates, renovations and countless other challenges, it’s crucial that you have a CPM system in place with all of the features you need to keep business thriving. Learn more about the ins and outs of resort financial management software below.

Challenges Hotels and Resorts Face Using CPM Software

Finding the right CPM software for your hotel or resort is essential to managing your business performance processes with efficiency. Because hotels and resorts need to do their budgeting and forecasting from a seasonal standpoint, it’s important that they have the tools to keep up with an ever-changing market.

Common challenges hospitality businesses face can include:

An Unpredictable Local Market

Keeping up with local competition is critical for successful hotel management. When other hotels open, close, change their rates or rebrand, the local economy shifts and forces other hotels to shift with it. You need a reliable method for gleaning economic data as well as data from your own hotel or resort’s performance in order to keep up with ever-changing economic factors.

Keeping Track of Reports

When you run a hotel, you need to have a solid report generation structure in place due to the sheer volume of data you need to document from multiple sources. Financial and operational reports require a substantial amount of upkeep that becomes difficult without CPM automation software.

Flexing With Change

Hotels need to keep track of many different revenue variables at once. Anything from a hotel opening next door to a handful of bad reviews could affect revenue in both short-term and long-term scopes. When this happens, hotels need the ability to bounce back from changes they can’t control and manage factors they have power over.

Keeping Up With Data Sources

Today, hotels and resorts need to keep up with metrics from a wide range of sources in order to properly adjust and plan their business strategies. Keeping up with local economic data and their own performance data — and having an efficient data storage solution — can be challenging tasks for hospitality managers.

Advantages of Implementing CPM Software for Hotels and Resorts

The right CPM software can make a world of difference for a hotel or resort. CPM software can help hotel and resort managers better manage data, create financial reports, analyze metrics from multiple sources, accurately track performance and much more.

Implementing CPM software in the hospitality industry can positively affect hotels and resorts in the following ways. You can:

  • Track hotel performance by monitoring metrics from room revenue, food and beverage revenue, conference room rentals, spa services and other applicable factors
  • Produce financial and operational reports with more accuracy and efficiency for multiple business units
  • Integrate your CPM software with existing booking systems and enterprise resource planning (ERP) software to consolidate hotel data for easy access
  • Perform budgeting and forecasting tasks with ease thanks to automation features
  • Perform tasks related to seasonal performance prediction to stay on top of the market and plan accordingly
  • Consolidate hotel metrics automatically and access them in one place
  • Create benchmarks for your hotel or resort and monitor them consistently
  • Automate time-consuming tasks so you can be free to work on higher-level duties

When you implement CPM software into your hotel or resort’s existing systems, the difference can be night and day. Surprisingly, even many major hotel chains are lagging behind other industries in their utilization of CPM software solutions. But the benefits of incorporating CPM software into hotel and resort management processes are too invaluable to overlook.

CPM software can help improve your hotel performance and streamline financial planning processes exponentially — in both the short and long term.

Long-Term Benefits of CPM Software for Hotels and Resorts

A brand new CPM software solution may seem intimidating at first, but once you get over the learning curve, you’ll start to see the benefits of implementing CPM into your hotel or resort almost immediately. The hospitality industry benefits from CPM software integration in a variety of ways — and many long term benefits come from this integration.

Resort reporting and budgeting software helps hotel managers and operators view their hotel or resort’s performance in detail and from multiple angles. It can also help automate processes that would otherwise take valuable time away from management while providing comprehensive analytic information and data organization services.

When a hotel or resort implements CPM software, the long-term benefits typically include:

  • Having a better handle on hotel performance and local economic factors
  • Increased revenue due to better revenue and expenditure tracking capabilities
  • An improved ability to predict market trends and hotel performance
  • An improved ability to adapt to internal and external change
  • Streamlined financial reporting processes and automated financial and operational reporting
  • Increased ability to manage hotel performance driven by seasonal demand and other economic factors
  • Improved return on investment (ROI) thanks to increased efficiency and better operational tactics
  • Access to more precise metrics, all in one central hub

Implementing resort financial management software into your hotel’s existing system fosters significant ROI for years to come if utilized optimally.

Contact Solver Global to Learn How CPM Software Can Improve Your Hotel or Resort

Solver is an international leader in providing businesses in all industries with state-of-the-art CPM solutions. To find out more about how we can help increase your hotel or resort’s ROI, contact our friendly team of experts today. With cutting-edge, cloud-based CPM technology, we can help you rise above the competition and generate long term results.