How FP&A AI is Changing Automated Budget Vs Actual Analysis

AI agents are making waves. Sam Altman, CEO of OpenAI, called them “the thing that will feel like the next giant breakthrough.” There are experiments in having agents shop for us, and already a third of consumers prefer to make a purchase in an automated/digital fashion. Firmbase’s AI agent has democratized AI in financial operations and beyond.

Agents are predicted to cut costs, streamline operations and, beyond that, change how we think about work. As Gartner puts it, “It also poses an organizational workforce shift from delivery to supervision.” That kind of change is particularly pertinent – and potentially especially valuable – for FP&A teams. Nowhere is that more obvious than in budget vs actual analysis.

Why it’s Worth Using FP&A AI to Change BvA Analysis

Budget vs actual analysis is sometimes approached as a checkbox exercise, but falling back on that approach means your organization is losing out on what can be a powerful chance to spot opportunities, mitigate problems before they become severe, and cut costs. 

That said, because it’s a process that needs to be completed on a regular cadence, requiring considerable data gathering, analysis and consideration, teams aren’t always enthusiastic about expanding the BvA process beyond the most basic needed to fulfil their responsibilities. 

AI agents for FP&A change that. With AI agents in the picture, the heavy lifting involved in BvA is done by machines and models, so that the professionals in the picture have the time, energy and mental space to dive into the details, gain a comprehensive understanding of the business reality, and make thoughtful recommendations based on that. 

In Gartner’s terminology, with AI FP&A teams can shift away from delivery, and towards supervision and analysis. Some of the most significant ways AI changes the BvA analysis process are:

• Shift to real-time data
• Expand the scope of the BvA process
• Avoid errors
• Make BvA collaborative

We’ll take each of these one by one. 

Shift to Real Time

It used to be possible to run BvA analysis once a year, or biannually. For most businesses, that’s no longer enough. Things change fast, and finance teams need to be one of the first on top of those changes. 

Relying on predictions and assumptions from 9 months ago when inflation changes, geopolitical upheaval, weather disruption and more has played havoc with prices, supply chains and timeframes means that your analysis and the steps taken as a result are no longer really backed by data. 

By making the BvA process automated and using AI, you can ensure that FP&A work is grounded in the real-time reality of your business all the time. Data is centralized, silos are avoided, and syncs are automatic. 

All this means that when you ask your FP&A AI agent a question, such as “How do pricing changes affect our revenue projections?” you’re getting responses based on the most up to date information in the business. Your recommendations will be far more relevant and meaningful for the company.

Expand BvA Scope

When BvA is a largely manual process, it is naturally limited in terms of how much information can be included in the analysis. Today, though, that can be problematic. An in-depth BvA analysis needs to include a wide range of data, because the analysis needs a lot of knowledge underlying it in order to be precise. This falls into 3 main categories:

• Internal information from across departments, from finance to operations to HR to sales to marketing to logistics and more
• External information as relevant, whether that is market factors, supply chain information, competitor insights, consumer behaviors, climate, etc. 
• Clarity about how these are gathered and calculated, in order to have confidence that terms are being used and data compared in a “like for like” fashion

Including much more information is no problem for a machine, which is not limited in data processing in the ways that humans are. And clarity and confidence are possible because setting up the platform to sync with the data you want to include is a thoughtful, methodical project in its own right, not an afterthought that gets short shrift as part of BvA. In that sense, automating BvA actually means that more careful human consideration and intelligence gets baked in.

Being able to spread out and include everything on the FP&A analysis wishlist enables analyses that are considerably more accurate, making recommendations on target for what’s really needed in the company. This is possible, once AI is doing the heavy lifting. 

Avoid Errors

Spreadsheets are no longer a practical solution to a BvA analysis process. No matter how beloved Excel might be in your company, it doesn’t make sense for the amount of data, speed and complexity involved in making BvA analysis what it needs to be for the modern business. The Excel-based model was also frequently error-prone, causing delays and frustration. 

AI is an obvious solution for avoiding errors, because computers are not impacted by many of the factors that often result in mistakes creeping into a BvA analysis. The most notable ways in which FP&A AI helps avoid errors include:

• No manual copying or transcription mistakes
• No human bias (for pet projects or tools, executive suggestions, etc.)
• Greater scope of data means less chance of blind spots
• Easy to include external as well as internal factors
• A need for speed does not fluster AI
• It’s impersonal, with no implication of blame or guilt
• More time available for finance professionals to analyze and assess the results

Make BvA a Truly Collaborative Process

To make BvA analysis as impactful as it can be within your organization, you need to make it a collaborative process at all levels. AI makes this much easier. 

With Firmbase’s AI agents, professionals from across the organization can work together towards the same goals, drawing on their personal experience and expertise and bringing that to the process. That’s because there’s absolutely no need for coding ability or technical expertise. The platform is intuitive and easy to use, and questions can be asked in normal language. It really is as easy as typing in, “What are our company’s topline drivers?”

All this makes it possible to streamline a BvA analysis process around a single business plan, no matter how many budget owners and stakeholders are involved. When there’s transparency of this kind, getting buy-in for solutions and recommendations is much easier as well. 

Change Your BvA Analysis With FP&A AI

The potential of AI to take the BvA process to a whole new level is immense. FP&A teams using AI effectively can provide more accurate analysis, with more relevant recommendations, for much greater impact in their organizations.

To understand how Firmbase’s AI-first FP&A platform can make automated BvA analysis far easier, faster and more impactful in your company, book a demo today.