2022 Annual Planning is just around the corner and operations at corporate seem to stop for most companies.
Major components of annual planning and forecasting are:
Annual Planning is typically performed in 3 Stages: Information Gathering, Negotiation, and Final Approval
We have all been in this situation of chaos and if you are wondering, you are not alone. Here are some tips & tricks to ensure this process is a step closer to efficiency:
Tip 1: Guide budget owners with tops down guidance prior to step 1. If given a blank slate, budget owners have no idea how many they are allowed to have - therefore, leading to unclear actions and outcomes. Most often, direct labor (any headcount tied to KPIs) can be provided with clear guidance (for example, 1 AE per $1m of ARR)
Tip 2: Ensure google sheets have data validation to keep the input data clean. If given the free reign of free-text fields, Finance will have to clean the data which takes up unnecessary time.
Tip 3: Ensure Recruiting is in the loop in the process. Often, recruiting teams are not part of this process and hear about the plan last. Recruiting capacity and bandwidth is crucial in execution of the locked plan.
Tip 4: Have clear insights and outcomes. One DRI has to be responsible for ensuring the approved plan (i.e., hiring plan) is active and reconciled. Often, questions arise on who has been filled, which are additional hires outside the plan, which are closed in plan vs. active in HRIS - this reconciliation is extremely important to have an accurate financial forecast and operational forecast.