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If construction companies want to gain more control over their financials, extended financial planning and analysis (xP&A) is an invaluable practice to implement. xP&A can help finance and operations teams within construction companies strategize better and be more agile when change orders come through on projects.
What Is xP&A?
xP&A is a type of approach to financial planning that expands upon the advantages of conventional FP&A to further assist with budgeting. For example, while FP&A offers forecasting, continuous planning, performance monitoring, and advanced analytical capabilities, xP&A takes these to the next level. Using xP&A practices, construction companies can connect all operational, financial, and strategic plans and remove the boundaries between operations and finance.
The key success factors of collaborative FP&A
Before getting into the benefits of xP&A, consider the main success factors to achieve collaborative planning using FP&A. These factors include:
- A progressive culture that strives for continuous improvement
- Connectivity that expands the company's perspective when it comes to models, data, and systems
- Readiness that enables connected planning with intelligent forecasting, scenario modeling capabilities, and others
- Complete transparency of systems and data in collaboration
- Partnering that entails consistent engagement with the company all through the planning process, monitoring and analyzing results, and using those results to make more informed financial decisions
The advantages of xP&A
xP&A offers numerous benefits that expand on all of the advantages of successful FP&A through improved connectivity and collaboration. There's practically no limit to what you can achieve with xP&A. For example, with xP&A, you can:
Fully align your business
Using xP&A, all operational, financial, and strategic plans work together seamlessly, keeping the organization aligned and progressing toward a common goal. You can also gain insight into how each department affects the others to indicate whether you need to make any adjustments for better alignment.
Eliminate work silos
xP&A also helps reduce silos for each department to give you a central, expansive view of your performance and plans. Coupled with the right analytics and reporting tools, this gives you the ability to better determine how various decisions impact each department and, subsequently, the company.
Continuous planning
Another critical feature of xP&A is continuous planning that constantly adapts to new events and conditions over time. In turn, processes remain consistently updated and benefit from increased automation.
Increased agility
Having a central view of all plans and operations and ample alignment enables you to fully comprehend what's taking place at all times. In the process, you can make faster and more well-informed decisions when needed. You'll also benefit from more efficient risk mitigation, the ability to figure out how to cut down on unnecessary expenses, and the chance to more easily discover new opportunities.
All of these benefits will help you gain more control over construction budgets using xP&A across your operations. Subsequently, you'll avoid overspending and other potential issues resulting from inadequate planning and insights.
Set up a call with our construction finance experts to see how Briq can help you win with the benefits of extended financial planning through our platform.
