During the current COVID-19 disruption, cannabis companies are relying heavily on analysis and reports from their financial planning and analysis (FP&A) teams to make crucial business decisions. Some are making decisions on a weekly or even daily basis due to market changes or new legislative measures.
Needing to pivot quickly is not uncommon, as the cannabis industry is always changing. But given the added market volatility caused by the pandemic, it is more important than ever to have the ability to see your data from an FP&A solution.
FP&A is one function in corporate performance management (CPM) platforms. CPM provides critical data for all aspects of the organization and includes reporting and analysis, planning and budgeting, and forecasting and financial modeling. FP&A is a critical area that directly impacts business decisions and creates business value. But due to inefficient processes, disparate systems, lack of accurate information and lack of a robust FP&A tool, many companies aren't achieving the full potential from their FP&A activities.
More specifically, FP&A provides senior management with a forecast of the company's profit and loss and operating performance on a 13-week basis (for proactive decision making), monthly, quarterly or annually. These reports apprise management about the current health of their organization and allow leaders to make the most informed and accurate decisions. Additionally, these reports play an important part in external communication to investors or external stakeholders.
While aspects of FP&A may seem simple, such as budgeting or monthly variance reporting, they are all links in the chain of the complex value-creation process. Being able to analyze opportunities and risks and react quickly is important for any financial analyst, CFO or controller.
Collecting the information is the easy part in FP&A. The difficult part is the analysis and being able to recognize gaps in the data to identify triggers/drivers needed to make business decisions. If there are any issues in a company's internal process for the collection and analysis of this data, future business decisions will be impacted.
Having an established FP&A process with appropriate supporting tools allows business leaders to:
The right FP&A solution can help cannabis businesses transform their budgeting and planning processes so they can adapt quickly to their rapidly changing environment.
We have partnered with Solver Global to provide cannabis companies the cloud-based tools to collaboratively plan and forecast expenses, headcount, inventory and revenue – all in real time. Contact our experts to learn more. For the latest regulatory updates or other information on running your business during disruption, visit our COVID-19 Resource Center.
