Balance sheet planning is included for one entity

Description

Balance sheet planning in Corporate Performance Management (CPM) software is a feature where businesses can perform planning and forecasting for one particular entity in their corporate structure. This tool assists in managing and predicting the financial standing of single entities, divisions, subsidiaries, or regional operations. This requirement is intended for smaller organizations looking for a more simplified solution.

Example Use Case

Scenario: A medium-sized manufacturing business has an extensive amount of assets that roll into the balance sheet. They model out lease vs buy scenarios from time to time which directly hit the balance sheet, and are required for bank loans.

Solution: The corporation uses the balance sheet planning feature model these plans and provide to the bank. The software allows the corporation to incorporate assets, liabilities and equity items into a comprehensive financial plan. This helps them to assess the financial performance, strategize and forecast this business's future which is crucial for the bank.

Considerations

Make sure the systems you are looking at include a rolled-up balance sheet by default. Do not assume that this exists. Since most planners are focused on P&L and Cash Flow, planning software vendors don't always focus heavily on the three-statement model.

If it does not, it can usually be setup during implementation. If that is the case, confirm that as new accounts and dimension values come into the system they will show up on the balance sheet with minimal effort.

Questions to Ask a Vendor

• Scalability: Can the software accommodate balance sheet planning for more entities as the business grows?
• Inclusions: Does the system come with a pre-configured balance sheet? If not, can it be setup easily?