By John O’Rourke, Vice President, Host Analytics

While there’s still a lot that will happen before we close the books on 2016, we’ve reached the point in the calendar when planning for the coming year gets fully underway. In fact, a recent survey of finance professionals and CFOs conducted by Host Analytics found that the majority of businesses today, 74 percent, are spending between two and six months engaged in year-end planning and budgeting cycles.

Whether you’ve mastered the year-end planning process or are just now adapting to new processes and systems, 2017 planning will be unlike previous years. The three biggest changes this year are the Brexit, the U.S. Presidential Election, and several new regulations in the U.S. that will impact not only companies based in the U.S., but also those doing business with them. Let’s take a closer look at each of these influences on year-end planning.

1. The full impact of Brexit on financial planning for companies doing business in or with Great Britain has yet to be seen. Though it is expected to have an impact on trade agreements,taxes, customs duties, and inward investments.

We can safely acknowledge that given all the variables and uncertainty around Brexit, financial modeling and planning for 2017 is far from business as usual – for companies based in Great Britain or those doing business with organizations located there.

2. The U.S. Presidential Election. Much like Brexit’s direct impact on Great Britain and its ripple effect on the rest of the world, the U.S. will elect a new president in November 2016. While the new president won’t take office until January 2017, depending on who wins and which party controls Congress, there could be an impact on the stock markets, bond markets, corporate and private taxes, and foreign policy.

Given the yet unforeseen impact of a new U.S. president and changes ushered in by Brexit, it’s clear that uncertainty is the new normal. To this end, finance teams need to build flexible planning models to accommodate both anticipated and unexpected changes.

3. New U.S. regulations: Several new mandates from the U.S. government will be introduced over the next several months that will impact planning for 2017 and beyond. These include the Department of Labor’s Overtime Rule, changes to Revenue Recognition, and the Financial Accounting Standards Update on Leasing Transactions.Here’s a little background on each of these regulations.

When the U.S. Labor Department’s new Overtime Rule goes into effect on December 1, 2016 it will have an impact on employees and employers. Whether you’re a U.S.-based business or have employees working in the States, it’s an important change that finance and human resources needs to factor into planning.

Essentially, the new overtime pay law ensures that employees making less than $47,496 a year are paid time-and-a-half overtime for any hours they work beyond 40 in a week. This includes salaried managers and professionals. By extending overtime protections to 4.2 million hourly and salaried employees in the U.S., finance and human resources will need to ensure hours and wages are accurately recorded and integrated with payroll and finance.

Another change that finance needs to prepare for is the Finance Accounting Standards Board’s (FASB) new Accounting Standards Update (ASU) as it relates to a company’s leasing transactions. This new guidance requires more disclosures and transparency when it comes to off-balance sheet accounting for lease assets such as real estate, manufacturing equipment, and airplanes, for example.

The third regulation change that we’ll cover is the FASB’s revenue recognition guidance, which takes a closer look at the way companies report revenue from contracts, particularly those organizations that provide goods or services of non financial assets. The guidance is designed to remove inconsistencies, provide a more comprehensive framework for addressing revenue issues, and improve comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets.

For publicly held companies, this new revenue recognition standard begins after December 15, 2017. Nonpublic companies should apply the standard to annual reporting periods after December 15, 2018.

Easing the Planning Process

To manage these changes and gain greater efficiencies in year end and year round planning, more finance professionals are moving to cloud-based applications. It’s no secret that the finance department is among the last in the organization to adopt cloud computing. As the technology has evolved, more finance teams are realizing the cost and time savings benefits of moving to the cloud. Of note, experts at KPMG estimate that 20 percent of organizations’ ERP systems are currently in the cloud and this will grow significantly over the next five years.

Most financial pros are aware of these latest shifts. The challenge, however, is being able to factor them into planning for the months and year(s) ahead.Three recommendations to help ease the process are:

1. Reconsider your reliance on spreadsheets for financial and operational planning. It’s clear that Excel isn’t going anywhere anytime soon, but that doesn’t mean it’s the best tool for the job. Consider alternatives such as pre-built budgeting, planning, and forecasting applications found in today’s enterprise performance management (EPM) platforms. These applications help eliminate manual tasks and allow you to focus on value-added analytics instead of getting sidetracked by the time consuming, management of error-prone spreadsheets that have been lurking for the past 30 years.

2. When it comes to actually moving to a cloud infrastructure, it’s not always as straightforward as anticipated. The “cloud washing” by IT vendors has resulted in confusion as offerings that are not truly cloud based are inaccurately positioned as such. This impacts employee productivity and the bottom line as finance is forced to return to the drawing board on their cloud strategy or, worse, goes backwards in time to pre-cloud accounting and finance systems. What you’ll want to distinguish is which “flavor” of cloud you’re signing up for – single tenant, multi-tenant, or hosted applications – and what the trade-offs are among them. Know that moving to the cloud requires careful and well thought out collaboration between IT and finance that should also be factored into year-end planning.

3. Eliminate silos in the planning process. While finance is the keeper of the books, the planning process should include each line of business across the organization. This way, you can model what-if scenarios such as the impact of changing fuel and commodity prices, currency rate fluctuations or headcount expansion plans on the bottom line, before you take action. With a comprehensive view into your company’s performance across the organization, you can more accurately and easily make informed business decisions.

For sure, planning for 2017 will be unlike other years. On the other hand, however, there will always be unforeseen economic shifts and internal changes that add complexity to the finance function. To easily adapt to changes and strategically plan for the future, more financial pros are moving away from reliance on spreadsheets and email, and toward cloud-based EPM applications for budgeting, planning, forecasting and modeling.  The flexibility, insight across the company, and uniformity of financial reporting makes it easier to execute tasks while freeing up staff to focus on value-added analysis and tackle more strategic initiatives.