Financial Planning in Strategic Projects

Does your strategic plan have a funding plan to go with it? Too many organizations spend time and money on a strategic plan only to shop it around to funders and hope someone bites. ❌ Those funders are going to ask you how you plan to fund your work and "that's why we're talking to you" isn't the right answer. (Guess what? This is the infamous sustainability question!) Your strategic plan has to have a funding plan alongside it. If scaling is part of your strategic plan, you need to know how much you need to raise by when to hit the benchmarks established in the plan. What's that saying? A dream without a plan is just a wish. If you have a funding plan built into your strategic plan, you can get key donors and funders invested early on in the strategic planning process. Then, when you're asked how you're going to fund this, you can say, "We already have commitments from X foundations and Y individuals and we're looking for support for Z" instead of presenting them with a shiny PDF hoping they'll jump at the opportunity. Oh, and in case it needs to be said, your development team needs to be part of the strategic planning process so that they can build out that funding plan and know which pieces of the strategic plan will be most compelling to which donors.

Best Practices in Developing Projections Models to Support Strategic Planning Strategic thinking, planning and evaluating strategic alternatives must be supported by a strong long-term projections (LTP) model. Best practices include the following: A comprehensive model is required to effectively evaluate financial performance, financing requirements and value creation. This requires P&L, Balance Sheet and Cash Flow statements, Key Performance Metrics (e.g. ROIC) and Valuation Analysis. The potential for value creation should be a primary factor in evaluating strategic plans.   Incorporate and Review Historical Performance. In developing a model for use in LTPs, it is important to incorporate history (3-4 years). The inclusion of history helps to identify key drivers, trends and interrelationships that are critical to projecting future performance. Second, it provides confidence in the relationship between these drivers and the actual financial results posted in prior years represented in the LTP model. Identify and Evaluate Key Assumptions and Business Drivers. Critical assumptions and business drivers that will affect future performance must be explicitly identified. Too often, these are buried in formulas in a model that reduces the ability to review, test and modify. Key assumptions will vary for each individual business. Market and competitive forces, product life cycles and introduction plans are generally important. Key costs drivers must be identified and incorporated into LTP models. Critical assumptions must be documented, reviewed and tested. Identify Strategic Issues. Key Strategic issues must be considered in the development of LTPs. These may include changes in the market, competitive threats, addressing weaknesses and human capital gaps, strategic investments and many other issues that will impact future financial performance. Robust and Flexible to support evaluation of Strategic Alternatives and Scenarios. The model should be flexible to facilitate changes in assumptions, scenario analysis and evaluation of strategic alternatives. High Impact Output (Presentation) Summary. Key performance measures and proforma valuation analysis should be auto generated within the model to facilitate summarization and presentation and enable changes and scenario analysis. Adapted from “Financial Management: Partner in Driving Performance and Value,” chapter 21, Long-Term Projections.

Scaling without financial alignment is growth in reverse. Here's how to optimize strategy, accelerate growth, and hit goals. As businesses scale, aligning financial strategy with short-term objectives and long-term vision is critical for sustainable growth. I've worked with many companies that was growing fast but struggling to keep financial goals in sync with their rapid pace. Here's how I’ve helped them recalibrate and accelerate growth:    1. Re-assessing the Budgeting Process: - We dive into their current budget - Identify inefficiencies, misallocated resources, and cash flow bottlenecks. By focusing on forecasting and creating more flexible budgets, we made sure the company could stay agile, even during rapid change.    2. Aligning Department Projects with ROI: Instead of treating each department's initiatives in isolation, we developed a framework that measured and tracked Return on Investment (ROI) for every key project. - Each department was aligned to strategic financial goals. - Projects that didn’t generate strong returns were optimized or postponed. - ROI prioritization became the backbone of decision-making.   3. Setting Clear KPIs and Milestones: - We defined key financial metrics for both short-term and long-term. - This allowed departments to align their actions with tangible outcomes. Knowing exactly how their work contributed to the broader financial goals, employees were on board, engaged, and proactive. Results: Cash Flow Improved by 25% in just 3 months Project ROI Increased by 30%, with higher returns on departmental investments Long-Term Financial Strategy now aligned with short-term operational goals The Takeaway: Financial alignment isn’t just about controlling costs—it’s about ensuring that every department, every project, and every dollar is pushing your business toward your ultimate goal. When you align your budget with ROI-focused projects, you achieve growth faster and smarter. If you need help developing and executing a financial strategy DM me Please share your thoughts in the comments Follow me, Beverly Davis for more finance insights  #FinanceStrategy #BusinessGrowth #ROI #Budgeting #FinancialGoals #StrategicPlanning #Founder #CEO

Strategic Budgeting and Forecasting Interview Insights 1 : How do you approach the annual budgeting process?  A: Begin by understanding the strategic objectives of the organization. gather input from various stakeholders, analyze historical data, and consider market trends to create a comprehensive budget that aligns with the company's goals. 2 : What steps do you take to ensure stakeholder alignment during budget preparation?  A: Engage stakeholders early in the process, conduct regular meetings to discuss assumptions, and adjust the budget based on feedback to ensure alignment with strategic objectives. 3 : How do you handle budget revisions during the fiscal year?  A: Monitor financial performance regularly and collaborate with stakeholders to adjust the budget as needed, ensuring it remains aligned with strategic goals despite changes. 4 : Describe your experience with FTE forecasting.  A: Analyze historical FTE data, consider upcoming projects, and engage with department heads to create accurate monthly forecasts that reflect both current and future staffing needs. 5 : How do you address discrepancies in FTE forecasting?  A: Investigate the root causes of discrepancies, such as changes in project scope or unexpected staff turnover, and work with operational directors to make necessary adjustments. 6 : How do you ensure the budget aligns with the company's strategic objectives? A: Collaborate closely with leadership to understand the strategic direction and ensure that the budget supports key initiatives and long-term goals. 7 : Can you provide an example of a challenging budget you’ve worked on? A: I once had to create a budget during a period of economic uncertainty, requiring careful scenario planning and constant communication with stakeholders to adjust assumptions as new information became available. 8 : How do you forecast revenue and expenses in a volatile market? A: I use scenario analysis to model different outcomes based on market conditions, allowing for flexibility in the budget to adapt to changes. 9 : How do you ensure that your FTE forecasts are accurate? A: I continuously review and refine my forecasting methods, incorporating feedback from operational directors and adjusting for any changes in project timelines or business conditions. Margin Analysis and Financial Modeling 10 : How do you conduct margin analysis? A: Analyze cost structures, revenue streams, and operational efficiency to determine margins. I then compare these against industry benchmarks and internal targets to identify areas for improvement. 11 : What is the impact of work order changes on margins, and how do you manage it?  A: Changes in work orders can affect both costs and revenue. I evaluate the impact by analyzing cost drivers and revenue adjustments, then provide recommendations to maintain or improve margins.

Scenario Planning Template (ppt download). Uncertainty is a given, but being unprepared doesn’t have to be. Combining a scenario planning tool with a robust financial model gives you a powerful framework for making informed, strategic decisions under any conditions. Every business encounters volatility, from market shifts and economic downturns to supply chain issues or unexpected competition. But great leaders don’t just react, they anticipate. They plan for multiple outcomes and are ready to adapt. That’s the value of Scenario Planning. The Scenario Planning Matrix enables organizations to visualize and plan for a range of possible futures by exploring four distinct situations: Best Case – What if everything goes according to plan—or even better? How do you scale quickly, capitalize on momentum, and capture full value? Tradeoff Cases – What if outcomes are mixed? What trade-offs, adjustments, or resource reallocations will help you stay on track? Worst Case – What if performance drops significantly? What’s your survival strategy, and how can you adapt operations to preserve cash and core capabilities? By layering these scenarios into your financial model—projecting impacts across your income statement, cash flow, and balance sheet—you gain clarity and foresight. Coupled with predefined action steps for each situation, your business becomes far more resilient and responsive. Why It Matters: Avoid reactive, short-term decisions that can hurt in the long run. Use data and financial projections to drive confident, long-term planning. Identify early-warning signals through leading KPIs to shift strategies before it’s too late. Build confidence across your team, board, and investors knowing you’re prepared for multiple outcomes. The future may be uncertain—but your strategy doesn’t have to be. Explore more about scenario planning and financial modeling at Corporate Finance Institute® (CFI) and follow Tim Vipond, FMVA® for practical tools and insights to lead with confidence.

Great CFOs don’t just cut spend—they create clarity. In a conversation with Alexander J. Freeman (CFO of Wursta), one critical insight echoed: “Take your Vitamin N.” With rising costs, tighter cash flow, and ever-shifting market conditions—Alex shared how top CFOs are evolving from rigid budgeting to agile planning. Here’s his framework: ➡️ 10 Must-Do Projects: The essentials—core operations and strategic bets that power the business forward. ➡️ 10 Nice-to-Have Projects: Important but not critical—things that can be postponed or deprioritized. ➡️10 Flex Zone Projects: The space to pivot, experiment, or pause when priorities shift. And here’s the kicker—have a shortlist of “if we win” projects ready to activate once targets are surpassed. This foresight enables quick action and maximized ROI when growth exceeds expectations. It’s not about frugality—it’s about focus. Prioritizing what truly moves the needle means giving yourself room to say yes to impactful initiatives. In Alex’s words: “If you’re always chasing the next shiny platform, you’ll burn the budget with no return. Plan your ROI stories before the spend.” Finance isn't here to block innovation—it’s here to build, with discipline and foresight. PS: Zenskar can help you automate core financial ops. DM to know how. 

Critiquing the Development of a Funding Plan: Its Theory, Practice, and Strategic Interaction Understanding the intricate dynamics between the development of a funding plan and its interaction with both the wider finance operating plan and strategic plan is essential for any banking professional. The theory behind developing a funding plan often emphasises structured, predictive frameworks that rely heavily on historical data and forecasting methods. In theory, these plans are designed to ensure liquidity and support strategic objectives with conservative yet sufficient funds allocated where they are projected to be most beneficial. However, the practical application of these theories in real-world scenarios often presents a different narrative. In practice, the alignment of the funding plan with the strategic and financial operating plans can be fraught with challenges. These include fluctuating market conditions, regulatory changes, and unexpected shifts in business strategy. Although the theory suggests a seamless integration, the practicalities require adaptive management and real-time decision-making to handle the complexities of the financial environment. Moreover, the interaction between the funding plan and the organisation's strategic plan is a critical area that requires a pragmatic approach. This interaction is not just beneficial; it is crucial for the long-term sustainability of the organisation. A well-integrated plan aids in the precise allocation of resources, enhancing the organisation's ability to achieve its strategic objectives efficiently. However, misalignment between these plans can lead to resource constraints or inefficient capital use that might impede strategic goals. It is therefore prudent for financial strategists and planners to not only devise realistic and flexible funding plans but also continuously evaluate and adjust these plans in alignment with the overarching strategic goals and the prevailing economic conditions. This ongoing adjustment ensures that the practice of funding planning remains as close to its theoretical ideal as possible, thus maximising the strategic benefits for the organisation. This critique shows that while theoretical frameworks provide a foundational understanding, the real-world application demands a more dynamic and responsive approach to manage the interaction between various financial plans effectively. This understanding is crucial for anyone involved in the financial planning and strategic management sectors, highlighting the need for an adaptive, informed, and strategic approach in financial management.

Strategic Financial Planning & Analysis (FP&A): Turning Vision into Reality In today’s dynamic business world, staying ahead means more than just analysing spreadsheets. Strategic FP&A is the engine of sustainable growth, bridging the gap between numbers and actionable insights. It’s a powerful discipline that helps organisations: ✅ Navigate uncertainties. ✅ Align efforts with long-term goals. ✅ Empower teams with data-driven decision-making. Here’s how a well-structured FP&A framework transforms your business: 🔹 Goals: Define your North Star 🌟. Ask yourself: Where do we see our business in 3, 5, or even 10 years? Whether it's dominating a market, creating groundbreaking products, or achieving financial milestones, clarity is key. 🔹 Strategic Plan: Build the blueprint for growth. Set timelines, milestones, and actions that ensure steady progress. Focus on resources, accountability, and adaptability to market changes. 🔹 Strategic Focuses: Prioritize what matters most. Are you aiming for revenue growth, market expansion, or product innovation? Concentrate on the drivers that give your business a competitive edge. 🔹 Strategic Goals: Translate vision into measurable results. Think in terms of brand value, product recognition, and building a thriving corporate culture. A goal without measurement is just a dream—set clear KPIs to stay on track. 🔹 Actions: Execution is everything. Re-engineer products, enter new markets, and build a strong brand presence. Every action should bring you closer to your vision while adding value to stakeholders. 💡 Pro Insight: FP&A isn’t just about creating a plan; it’s about continuously adapting. 🔸 Use scenario planning to prepare for the unexpected. 🔸 Leverage Gap Analysis to uncover what’s missing and fine-tune your strategy. 🔸 Employ advanced analytics tools to extract actionable insights from raw data. Why It Matters: Agility: Stay flexible to pivot as market dynamics shift. Data-Driven Clarity: Make informed decisions confidently. Team Alignment: Unite every level of your organization under one clear strategy. 🌟 The Bottom Line: Strategic FP&A is more than a finance function—it’s a game-changer for leadership, empowering organizations to grow with purpose, resilience, and efficiency. 📢 Let’s connect! Whether you’re exploring FP&A for the first time or refining your processes for 2025, let’s talk about best practices, tools, and strategies that work. Share your challenges in the comments or drop me a message. Together, we can make your vision a reality! ▪ Follow me for more insights on strategic planning and financial management! ▪ Click the 🔔 to get notified about new posts! ▪ Subscribe to my monthly newsletter, Insights from an FP&A Head, for the latest trends in FP&A! #StrategicPlanning #FPA #BusinessGrowth #Leadership #FinancialStrategy #Innovation

Project Identification to Approval Process There was a time when I managed the project accounting for multi-billion dollar Shopping Malls, Hotels, Residential, and Mixed-Use developments. There were about 10+ new developments and extensions of existing projects—plenty in the pipeline. Plus, I had 25+ operational business units to manage the fixed assets accounting and physical verifications. Managing multiple Project and Development Managers was not a walk in the park. Everyone wanted either to get their project approved or get their contractors paid, or have their monthly reports. Then we had our routine project accounting and reporting, project dashboards and status reports, pipeline projects for strategic plans, project cash flow, budgeting, forecasting, and the list goes on. I will share more on project accounting tomorrow. It was the craziest period of my professional career. My team and I were drowning under piles of never-ending work. When I look back, I realize that due to that pressure, my learning curve of managing projects accounting turned to months instead of years. If you think project accounting starts when you upload the project budget to the system or begin processing contractors' payment certificates, I can tell you that's not the case. It begins with a project identification at the strategic plan or budgeting stage. Based on my experience, finance is involved almost at every step. This is a quick overview of what I mean (without getting into minute details): 1- Strategic Planning or Budgeting Stage - You have to work with the development managers to have a Seed Money estimation. 2- Seed Money Approval - Review and approve the approval request. 3- Market Study & Due Diligence - Review and approve consultants' proposals. 4- Preliminary Concept Design - Witness opening of Request for Proposals (RFP) to engage architects and cost consultants. 5- Project Cost Estimate - Support development managers in estimating project costs. 6- Pro Forma P&L- Work with operations to prepare Pro Forma P&L. 7- Financial Feasibility - Conduct financial feasibility in coordination with development managers. 8- Project & Budget Approval - Finally, support teams in preparing, reviewing, and approving the board approval requests. And the accounting side of things hasn't even begun yet. I will discuss this in detail tomorrow in "Accounting for Projects". Now you see what I mean. 💡 𝘛𝘩𝘪𝘴 𝘪𝘴 𝘱𝘢𝘳𝘵 𝘰𝘧 𝘵𝘩𝘦 "𝘔𝘢𝘯𝘢𝘨𝘪𝘯𝘨 𝘗𝘳𝘰𝘫𝘦𝘤𝘵 𝘈𝘤𝘤𝘰𝘶𝘯𝘵𝘪𝘯𝘨" 𝘤𝘰𝘶𝘳𝘴𝘦 𝘐 𝘵𝘦𝘢𝘤𝘩 𝘵𝘰 𝘤𝘰𝘳𝘱𝘰𝘳𝘢𝘵𝘦 𝘵𝘦𝘢𝘮𝘴 𝘢𝘯𝘥 𝘪𝘯𝘥𝘪𝘷𝘪𝘥𝘶𝘢𝘭 𝘨𝘳𝘰𝘶𝘱𝘴. #MAKAlpha #TheFinanceMasterclass Coming Soon! ------------------------------------------------------- - Follow Abdul Khaliq + 🔔 - Sharing the essence of 20+ years of journey. - I mentor and train finance and account professionals. DM for details. - You can download all my work in PDF format by visiting my profile.

How I Approach Funding in a Product Operating Model (While Still Dealing with Projects) I still have many questions about how to fund teams in a product operating model, especially when project funding still exists. Here’s how I approach it: 1. Start with Strategic Objectives We begin with the strategic objectives set by each business unit. These are the big, hairy, audacious goals based on the strategic decisions of where to play and how to win. 2. Fund the Baseline First Since we operate a product-based model, the first allocation of budget is non-negotiable. Every team must be funded with the minimum capacity (and any software/3rd party needs) needed to run and support their product (business capability, value stream, customer journey, platform etc) aka "keep the lights on". This ensures operational continuity. 3. Allocate the Rest of the Budget to Strategy Execution The remaining budget goes toward driving strategic objectives (let's assume we have no operational essential or mandatory needs). This requires a combo of top-down and bottom-up alignment: > Top-down: We may decide that no more than 20% of the budget should go toward Goal C. > Bottom-up: Teams identify what’s needed to meet objectives e.g., Goal A may require buying System X and hiring skills of A, B, and C. Determining how much we want to invest in is often the hardest part of planning. This process involves negotiation, iteration, and often a good dollop of politics. 4. Capture Investments OnThe Strategic Plan Once investment decisions are made, we can then create a strategic plan. It's important to clearly distinguish between product (team-based, ongoing) and project (time-bound, scoped) investments. Even in 'pure' product models, some work will still be delivered through projects. 5. Release Agile Investment Quarterly For investments tied to team capacity (i.e., "agile" product funding), we release funds incrementally each quarter. Continued funding depends on: a) the strength of the team’s roadmap, b) evidence of delivery and outcomes, c) and perhaps the most important - the evolving strategic context (e.g., a material shift in business direction may lead to reprioritisation or a new strategic plan entirely). I have a blog post that goes into this in more detail - https://lnkd.in/eWnQJcRY cc John Cutler Matthew Skelton Interested in more content like this? Check out my new book - “The Accidental CIO: A lean and agile book for IT leaders” . 📕 Amazon UK - https://amzn.to/48J7T3i 📕 Amazon US - https://lnkd.in/eYEW6R2n 🔈 Also on Audible!