1 What is FP&A?

FP&A stands for financial planning and analysis, which is the process of creating, reviewing, and updating financial plans and forecasts, as well as analyzing the results and variances. FP&A helps companies understand their current situation, anticipate future scenarios, and evaluate different options and trade-offs. FP&A also provides recommendations and advice to senior management and other stakeholders on how to optimize the financial performance and value of the company.

3 What are the key FP&A activities?

FP&A encompasses a range of activities that can be categorized into four main areas: planning, forecasting, reporting, and analysis. Planning involves setting the financial goals and targets for the company, as well as creating the budget and the long-term plan. Forecasting requires updating and revising the financial plans and forecasts based on the actual results and the latest information. Reporting necessitates preparing and presenting the financial reports and dashboards that summarize the financial results and performance indicators. Analysis involves conducting various types of financial analysis, such as profitability, margin, cash flow, return on investment, sensitivity, and risk analysis. Each of these components require defining assumptions, parameters, and methodologies to build financial models and scenarios; analyzing variances between actual and planned performance; communicating key findings to senior management; and providing recommendations for improving financial performance.

4 What are the skills and tools for FP&A?

FP&A requires a combination of skills and tools to perform activities effectively and efficiently. Financial modeling is a must, requiring knowledge of accounting, finance, and business concepts, as well as proficiency in spreadsheet software like Excel. Data analysis is also important, involving collecting, organizing, processing, and interpreting financial and non-financial data. Business acumen is necessary for understanding the business context, strategy, and objectives, as well as external factors and trends that influence the company. Finally, communication is key for conveying and presenting financial information in a clear, concise, and compelling way. It requires language proficiency, grammar mastery, and an ability to tailor the message to the audience.

5 How can you improve your FP&A skills?

FP&A is a dynamic and evolving field that requires continuous learning and improvement. To sharpen your FP&A skills, you can seek feedback from experienced peers and mentors, take online courses or read books about the subject, join professional networks and associations, and challenge yourself with new projects or tasks. This way, you can gain a better understanding of FP&A, its benefits, activities, skills, and tools. With the right knowledge and resources, you can develop your FP&A capabilities and performance to help your company strategically plan for the future.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?