Best Practices for Financial Planning for a Business: What Actually Works in 2026

Blog Post By Jandir Matos, VP of Finance at Centage

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Financial planning best practices get written about constantly—but most advice is either too generic to be useful or too enterprise-focused to apply to growing businesses. If you're running a company with $25M to $500M in revenue and a finance team that's working hard but stretched thin, here's what actually moves the needle in 2026.

Best Practice #1: Build Your Data Foundation Before Anything Else

Every other best practice depends on this one. If your financial data is fragmented across spreadsheets, manually exported from the GL, or inconsistently structured across entities, no amount of planning sophistication will produce trustworthy results.

A 2024 study in Frontiers of Computer Science found that 94% of business spreadsheets contain errors. When your financial planning infrastructure sits on top of error-prone spreadsheets, those errors propagate into every budget, forecast, and scenario your team produces.

What a solid data foundation looks like: native GL integration so actuals flow automatically, a standardized chart of accounts across all entities, timely posting of actuals (within days of period close, not weeks), and a single planning platform that serves as the source of truth rather than a collection of linked files.

Best Practice #2: Model Workforce Costs with Precision, Not Averages

For most businesses, people costs are the largest budget line item. The Bureau of Labor Statistics reports total compensation averaging $43.93 per hour, with benefits representing 30.9% of that total. For service-oriented businesses, payroll can reach 40% to 80% of gross revenue.

The best practice here is straightforward but underutilized: model workforce costs at the position level, not as aggregate averages. Individual salaries, specific benefit structures, actual hire dates, and department allocations. When a hire shifts from Q1 to Q3, the budget impact should cascade automatically. When benefits differ by employee type, the model should reflect that. For a deeper dive, our article on using modern FP&A for workforce planning covers this in detail.

Source: Best practices informed by AFP 2026 FP&A Benchmarking Survey, FP&A Trends Survey (2025), and Centage mid-market customer outcomes.

Best Practice #3: Move Beyond Static Annual Plans

The annual budget isn't going away—it provides the fixed targets boards and investors expect. But relying exclusively on a plan that's locked in October to guide decisions through the following September is increasingly risky.

The FP&A Trends Survey found that 77% of organizations using dynamic, driver-based models rate their forecasts as good or great, compared to just 27% with basic models. That's a nearly 3x quality gap based on methodology alone.

The best practice is a hybrid approach: an annual baseline budget for governance and accountability, combined with quarterly or monthly rolling forecasts that keep the plan current. When your planning platform connects to the GL and updates automatically, reforecasting becomes routine rather than heroic. Our article on using flexible forecasting to future-proof your budget offers practical guidance on making this shift.

Best Practice #4: Design Collaboration Into the Process

The AFP's 2026 survey found that only 38% of organizations use structured scenario planning—but those that do show significantly higher effectiveness across all planning dimensions. The implication is clear: when the tools make participation easy, the quality of the plan improves.

Effective collaboration means department heads receive clear, scoped tasks through workflow-based systems. They see only their relevant data, enter it in a controlled environment, and submit through an approval process. The finance team gets timely, clean input without chasing it through email threads. This isn't just a nice-to-have—it's the structural change that transforms budgeting from a one-person spreadsheet marathon into a genuine organizational exercise.

Best Practice #5: Match Your Tools to Your Team

This is the best practice that encompasses all the others. The AFP data showing that technology investments haven't met expectations for many organizations often traces back to a mismatch between platform complexity and team capacity.

For growing businesses, the right tool implements in weeks rather than months, is owned by finance professionals rather than IT, handles your actual complexity (entities, workforce, GL integration) as standard features, and delivers measurable value within the first budget cycle. Our guide to strategic budgeting and planning questions can help you assess whether your current tools are keeping pace with your business.

Best Practice #6: Invest in the Reporting Layer

Financial planning doesn't end when the budget is approved or the forecast is updated. The value is realized when those numbers reach the right people in the right format at the right time. Your planning platform should make it easy to generate consolidated financial statements across entities, budget-vs-actual variance reports at any level of detail, scenario comparison views for leadership, and department-level drill-downs for operational reviews.

The ability to move from a consolidated view to a specific line item to the assumption behind it—without opening separate files or tracing formulas—is what transforms financial planning from an annual exercise into a continuous strategic tool. For more on how this reporting capability supports consolidation, see our article on solving complexity with financial reporting consolidation.

The Best Practice That Ties Everything Together

Every best practice above points to the same underlying principle: financial planning should make your finance leader more strategic, not more operational. When the data foundation is solid, when workforce costs are modeled precisely, when collaboration is structural, and when the tools match the team—the CFO stops spending their time maintaining the planning process and starts using it to drive the business forward. That shift, from maintenance to strategic insight, is the ultimate measure of whether your financial planning practices are working.