Plansmith Blog

Planning: Many Aspects, One Purpose

Posted by Sue West on 7/12/22 2:41 PM

I’m often asked, “What are the differences between a plan, a budget, forecasting, reforecasting, what-ifs, and stress testing?” Although some of the actions are similar and often intermingled in conversation, it’s their purpose that defines them. If you’re a client, most even involve similar keystrokes using your Plansmith software navigation; yet each plays a unique role within your organization’s total planning process. Let’s discuss.

Budget

To start, everyone’s familiar with a budget, but let’s make sure we see it for what it really is. A budget is a prediction or forecast of a financial position at a set time in the future, typically one year. A budget represents a desired financial outcome and requires consent by your board of directors. Most often a Budget is primarily thought of as cost allocations, but when combined with ideas regarding new business, you will often hear it referred to as a Plan. Once approved, the Budget Plan never changes. It is ‘set in stone’ for the duration of your selected time period.

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Adjust to Changing Economic Environments in 6 Steps

Posted by Sue West on 6/7/22 10:41 AM

While the economic environment continues to shift from the effects of COVID-19, financial institutions aren’t out of the woods. As 2022 heats up into the summer months, inflation, rate increases, and an overall sense of uncertainty loom over markets. So, how do you begin to measure the financial impact today’s economy will have on your business? By utilizing a true planning model.

A professional forecasting platform for Budgeting and ALM/IRR adapts to changing conditions. As it is relationship-driven, it can be set to react to environmental changes, including rates. As the rate environment shifts, so should your balance sheet growth and product mix. Planning models help you test the impact of such changes and measure results in minutes, not hours.

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Three Considerations for Rising Rates in 2022

Posted by Dave Wicklund on 5/3/22 9:46 AM

The Fed has officially raised rates, with the intention of continuing to do so several more times this year. What does that mean for your financial institution, and how will it affect your Budgeting and ALM/IRR programs in 2022? Let’s focus on a few areas of concern, specifically Financial Reporting, Strategic Decision Making, and Board/ALCO oversight.

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Help! The Rates Ate My Budget

Posted by Sue West on 4/25/22 10:58 AM

Planning in a Rising Rate Environment….didn’t see this coming?

We all knew that rates would be on the rise in 2022; it’s a normal reaction in an inflationary economy. But how many of us were able to predict when, how much, and how often those changes would occur?

Not to worry, one of the greatest advantages of a full simulation model is its ability to adapt! Managing your current plan should be no big deal as your Plansmith system uses dynamic models and a monthly RateForecast download to keep your plan current. This is truly where our products perform because of their ability to provide management with balance sheet, income statement, and yield/cost information that is current and reprojects the anticipated outcome at year end.

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3 Big Misconceptions of CECL in 2022

Posted by Brett Hendricks on 4/11/22 1:30 PM

CECL is coming soon and isn’t going away. However, many financial institutions have not yet solidified their CECL plans. Maybe your CECL Committee was overwhelmed with choosing a solution, attentions/resources were diverted to pandemic recovery, or maybe busy day-to-day responsibilities and running your bank or credit union unintentionally let CECL slide to the backburner.

Though it’s been a stressful topic for years, Plansmith has made the process of adopting CECL as simple as possible. In fact, almost 300 organizations have already purchased and implemented our CECL solution.

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Peer Analysis: What Is It and Why Does It Matter?

Posted by Chris Lake on 3/8/22 8:28 AM

As technology evolves and consumer trends are affected by outside social influences, including the COVID-19 pandemic, financial institutions are faced with ever-increasing competition. It is critical then, that organizations adopt new strategies to excel within their respective markets.
One of the best ways to do this is to incorporate peer analysis into your organization’s planning process.

Peer analysis is an impactful way to evaluate your bank’s performance within the context of your operating environment and business model. It can help you identify new opportunities, manage competitive pressures, and address regulatory hurdles. There are many facets to quality peer analysis but the most meaningful analysis hinges first on selecting the right peers.

Eliminate the ‘Yeah, buts’

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Core Planning Concepts: What Can Finance Learn from Marketing?

Posted by Megan Plis on 2/3/22 2:46 PM

For six wonderful years, I’ve had the privilege of being a part of Plansmith’s marketing team. From marketing assistant, to department manager, to my most recent role as Director of Marketing, I’ve experienced firsthand how important our company’s mission is: improving planning. Why? Because there is nothing more frustrating than having a brilliant idea with no real way of making it come to fruition. However, with incredible people and a quality plan, anything is possible – and doable.

Like many of you, I notice how important the planning process is when I’m putting together my ideas for next year. Though a marketing plan is a bit different than financial institution planning, the core concepts are the same.

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Transform Your Budget into RESULTS in 7 Steps

Posted by Jenny Kane on 1/5/22 12:17 PM

Each January, we love to set resolutions. We painstakingly choose a lofty goal or two and optimistically embark, declaring, “this will be THE year for change!”.

Unfortunately, we often lose steam and quickly return to what is comfortable. For lack of a better term, we fail. We fail to change our approach and to reach our goals.

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Should You Focus on CECL in 2021? The Short Answer is YES

Posted by Brett Hendricks on 10/5/21 2:23 PM

2020 was an unprecedented year. Just when you finished creating a budget, it was decimated by the economic crisis. From there, time was spent reforecasting, helping allocate PPP loans, and adjusting to changing rate environments. Fast forward a year, and we’re slowly starting to get back to business as usual.

In addition to the usual financial planning, what do regulators want you to focus on in 2021? For most financial institutions, it’s going to be CECL.

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When in Doubt, Peel the Onion

Posted by Sue West on 9/8/21 8:58 AM

Although we develop software to mathematically convert ideas into measurable outcomes, we have always viewed Plansmith as an education company. Not education as in ‘a + b = c,’ but in the way relationships and behaviors drive a financial outcome. This year, we are introducing a new educational solution called Budget Playbook. This online tool connects vision with purpose and execution to help you reach your budget targets. At Plansmith, we use Budget Playbook to dive into the relationship between ideation and plan execution to foster communication and drive better results.

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