FP&A is a Swiss multi-tool in a pocket of a management team
With constantly evolving role of the finance function in the organization, these are FP&A practitioners who feel the most pressure to be jack-of-all-trades. Growing variety and complexity of tasks force them to develop skills, both hard and soft, to keep up with all requirements and expectations.
There is a specific product on the market I could associate FP&A with, and this is a Swiss multi-tool.
So, if FP&A were a Swiss multi-tool, how could we sell it?
FP&A is a perfect fusion of quality, practicality and reliability. It is like an entire toolbox packed into a single sophisticated multi-skill team that’s handy enough to help you with whatever your day brings you.
Featuring numerous functions, FP&A is a super compact solution to a vast majority of your financial DIY tasks.
Metal file = Business partnering
Being both finance professionals and trusted business advisors, FP&A practitioners smooth out the rough edges between business departments and finance function. They contribute to business projects bringing in financial perspective, advise on improvements to polish business initiatives before the launch.
Chisel = Analysis
FP&A teams perform insightful analysis by drilling down and diving deep into available internal and external data. Carving out one layer after another analysts identify the root causes of the companies’ issues. The depth of the analysis is monitored and controlled to deliver the best insights/efforts ratio.
Can and bottle opener = Uncovering and providing insights
Together with business departments FP&A teams make the initial puncture by pointing out an existing business issue. With this focus on a specific business problem FP&A teams work their way through data sets to uncover insights and find solution to the business issue.
Scissors = Presentations and storytelling
Having access to a large variety of internal and external data sources, FP&A teams are true craftsmen who cut out relevant pieces of information, crop diagrams and graphs to zoom in on the most important findings, put it all together and build a storyline to better communicate insights to management.
Blade = Budgeting
Budgeting is one of the core FP&A planning activities the goal of which is to transform strategic objectives into operational plan by slicing and allocating available resources. Budget’s initial function is to plan financials in advance to determine requirements in resources for teams, projects and initiatives, to prioritize them, assign funding to the most beneficial ones and cut resources of those which bring less value.
Screwdriver = Rolling forecast
FP&A function performs rolling forecasting to enable company to better respond to changing conditions and drive business decisions with sufficient level of confidence. Inserting new available information into forecasting models, FP&A teams help elaborate action plans to hold company’s activities connected to the reality and aligned with its strategic objectives at the same time. These action plans may include review of the approach to capital allocation, loosening/tightening budgets, other initiatives focused on business optimization or acceleration.
Ruler = Performance management
FP&A teams together with management define a set of KPIs aligned with company’s goals. These KPIs are used to measure performance and track progress on the strategic and operational levels. When significant variance is identified FP&A function analyzes the reasons behind the deviation, initiates and takes part in elaborating action plans to mitigate risks or exploit opportunities.
Saw = Critical thinking
Critical thinking is an inalienable skill for all FP&A professionals that is especially useful when assessing business initiatives and supporting decision-making process. FP&A teams evaluate risks and opportunities, define metrics for decision making, measure the impact and cut off those initiatives which are less beneficial to the company.
Pliers = Influence
The FP&A function has a unique position in the organization with its 360-degree view of the company’s activities and access to details. FP&A teams take a firm hold of their companies’ financial performance by using diversified input information to amplify revenues and profits, influence decision-making process and shape strategies.
Seatbelt cutter = Problem-solving skills
An emergency can and will occur unannounced. However, FP&A team can help a company avoid being trapped in a crisis and get out of it with little or no damage. Both planning for risks and problem-solving skills contribute to elaboration of action plans of how to deal with emergencies.
No task is too big or small for this mighty team. FP&A is a real business companion with lifelong learning potential.
Would you buy it?