Best Practices

Preparing for Annual Planning Season: Tips for Finance Teams

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Planning season is just around the corner, evoking a range of feelings from finance teams (mostly dread). We understand why. Annual planning is a heavy lift, often riddled with frustrations, miscommunications, and many iterations before a plan becomes final. Our suggestion: prepare now. Being proactive in how you approach the planning exercise organizationally can relieve some of the burden. 

What are we aligning toward, anyway?

At its core, annual planning acts as an interlock — aligning the operating plan toward the company’s north star. Well-equipped teams yield the best results, meaning teams across the organization must first be aligned with the planning processes and methodologies. From that foundation, it’s easier to ensure everyone is clear on the company's direction and the roadmap to get there.

During annual planning, every leader comes to the table with their own requirements or expectations on how they will drive their organization. And since the finance team must take all those (often competing) inputs and create a cohesive plan to move the company forward, it’s imperative that you start with CEO alignment around the company’s north star. It can take some time to get to a place where you’re in lockstep with the CEO, effectively acting as their voice as you negotiate with department heads, so now is an excellent time to start having those conversations.

Once you’re crystal clear on the north star, you can reverse engineer from there what it will take to reach the goal.

Start with educating business partners

There’s a good chance that your business partners don’t fully understand the intricacies of the planning process, the effort required for favorable outcomes, or its significance for the company. It’s in your best interest to educate them. Depending on the organization's size and culture, this education can be delivered in different ways. Consider inviting department leaders and key team members to live educational sessions with a Q&A segment. Alternatively, you could host workshops with various teams, guiding them through their past performance trends — pinpointing what went right and wrong — and showing them how to leverage historical data for future decisions.

If everyone begins planning season on the same page — understanding the company’s north star, the planning process, and what’s needed from them —the process will go much more smoothly.

You have to educate yourself and your team, too

As much as we’d love everyone’s inputs to fit together like a puzzle on the first try, there will be negotiations. Learn as much as you can about each function. Business acumen and the ability to be cross-functional sets great finance leaders apart. Look at things through your business partners’ eyes. You win people over by fundamentally understanding them and their function. Speak their language, build relationships, and garner trust.

Understanding the motivations behind people’s expectations will help you sell them the numbers they need to believe in. The ability to reframe outcomes that might at first appear negative into an opportunity for them and the business is critical to obtaining buy-in. People want to do their best work and get the best results. Finance should help illuminate that path to success, casting a vision with the plan they’re creating.

Find out how other leaders do it

As you plan for planning season, lean on your network for support and ideas. Leverage your community to find out what's working — and not working — for them.

To get you started, Vareto and Trace hosted Gainsight CFO Alka Tandan, VP, Financial Planning & Analysis at Pindrop and former Abnormal Security Head of Finance Sam Harris, and Health Gorilla SVP of Finance Sun Choi in a conversation with Operators Guild co-founder and CFO Casey Woo on best practices for making the annual planning process less painful. Watch the recording to find out what they said.

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