We are an international media company, currently using only the general ledger (G/L) functionality within our ERP system, tagging all transactions by dimensions such as department and location, so that we can pivot the information and import it into Excel models for budgeting and forecasting. As a high-growth company, these dimensional parameters are in constant flux, requiring adjustments not only in the general ledger system but also synchronized updates across all upstream systems. A significant amount of this work falls on the accounting department, which extends the monthly hard close timeline.

I realize that there are many planning tools on the market that the FP&A team could potentially choose, and these tools typically integrate easily with our general ledger system, including the planning modules that come with the ERP. However, my core question is: do most FP&A departments actually track based on the data flows provided by accounting? I tend to think that contracts could be obtained from the legal department for analysis, credit card spending could be analyzed by individual dimension, and so on, which might effectively reduce the burden on the accounting department.

From a practical standpoint, budgeting typically requires multi-dimensional data support, and the general ledger, as the core carrier of financial data, is of utmost importance in terms of accuracy. However, if all dimensional adjustments rely on manual accounting operations, it is not only inefficient but also prone to human error. Therefore, exploring alternative data sources or automated integration solutions may be key to optimizing the process.

Our company is currently in a phase of rapid expansion, with frequent changes in business structure, which requires flexibility in the budget model. If the FP&A team could directly access raw data from business systems such as contracts, procurement, and HR, and perform their own cleansing and modeling, it might reduce reliance on the accounting department while accelerating the monthly close. Of course, this requires establishing clear data governance rules to ensure data consistency across different systems.

Ultimately, I believe the core of the issue lies in: should the FP&A department act as a data consumer or a data producer? In the traditional model, accounting is responsible for recording, and FP&A is responsible for analysis; but in a dynamic environment, this division of labor may be too rigid. Perhaps a better solution is for FP&A to directly connect to business systems, using self-service analytics tools, while accounting is only responsible for the final reconciliation and audit of the general ledger. This way, the authority of financial data is maintained, and the responsiveness of budgeting is improved.

Of course, this is not to deny the value of the general ledger. The general ledger remains the foundation for statutory reporting and auditing, but the operational dimensions needed for budgeting (such as department, project, customer) may be more appropriately extracted from business systems. We are currently evaluating the ERP's built-in planning module, as well as third-party specialized planning tools, hoping to find a solution that integrates seamlessly with the general ledger while supporting flexible dimensions.

In summary, I tend to believe that most FP&A departments do rely on accounting data flows, but mature companies will gradually build independent data pipelines to reduce the accounting burden and improve efficiency. Our company is exploring in this direction and looks forward to hearing from peers about their experiences.