Financial planning for 2027: which mistakes can your company not afford to repeat?

Year-end is when many companies set the budget for the next cycle. In many cases, the approved document loses its usefulness before the end of the first half, either because the assumptions did not hold up or because no one returned to it after approval.

For 2027, the review comes with other points of attention, such as the start of CBS collection, one of the new consumption taxes under Brazil's Tax Reform, and the adoption of CPC 51, the Brazilian version of IFRS 18, which changes how financial statements are presented. Even so, the most common planning mistakes tend to repeat from one year to the next.

Unrealistic projections

A frequent mistake is to start from the current year's results and apply a growth percentage to every line. The method is quick, but it carries into the new year expenses that may no longer make sense, and it overlooks changes in the market, the customer base and the cost structure.

Assumptions on revenue, pricing, defaults, exchange rates and interest rates need to be documented, along with the source of each number. That way, when the scenario changes, the company knows what to review. Working with more than one scenario also makes it possible to decide in advance what to do if revenue comes in below forecast.

A budget without indicators

The budget shows how much the company intends to bill and spend. Knowing whether it is on track requires indicators tied to those targets, such as margin by product or business unit, average collection and payment periods, operating cash generation and debt levels.

Without them, the gap between plan and actuals only becomes visible when the quarter closes, and there is less room to correct course. Each indicator also needs an owner and a review frequency that matches the pace of the business.

Lack of follow-up

The budget is often presented to the executive team, filed away and only revisited in the next planning cycle. In the meantime, hiring and investment decisions are made without reference to the plan.

Monthly tracking, with variance analysis and periodic forecast reviews, keeps the budget working as a management tool. This requires a reliable, on-time accounting close, since that is where the actual figures come from.

How SW VBR Brazil supports this planning

SW VBR Brazil supports companies in preparing budgets, under the traditional model or zero-based budgeting, and in structuring business plans, financial models and performance indicators. The work can include preparing information packages for the board.

This content is for informational purposes. The application of these recommendations to your company's specific circumstances should be assessed with technical support.

If your company is putting together its 2027 plan, contact the SW VBR Brazil team through the link in our bio or via our institutional website.