As the business landscape continually changes, organizations are increasingly pressured to expand their business, meet shifting customer expectations, and ensure that their in-house operations are kept intact.
One of these essential operations is Financial Planning & Analysis (FP&A).
FP&A involves financial activities such as budgeting, forecasting, and analysis. The data culled out of these activities can be used to provide support to the organization’s C-suite.
Nowadays, it can be almost impossible for any company to become profitable without careful financial planning and cash flow management.
What do FP&A Professionals do?
FP&A professionals are managers, analysts, and even high-level directors who supply financial insight and data to the company’s top brass, informing major operational decisions that affect part or all of the business.
These professionals will be heavily involved in your annual budgeting process, and they will provide the necessary analysis to forecast your financial performance.
By checking on industry trends, past reports, and the business landscape and industry you’re working in, FP&A professionals come up with data, insights, and advice on how you can explore growth and improve your operational efficiency. They will interact with the higher-ups in reporting and sometimes directly manage some aspects of the business- this is especially true when they are recommending how to execute a company’s plans and anticipating obstacles and challenges that may arise.
FP&A professionals can also be tasked with supervising a wide range of financial responsibilities. These may include income, taxes, capital expenditures, investments, expenses, loans, debt management, and financial statements.
Are they also accountants? Well, yes and no. While accountants can be FP&A and vice versa, the role of accountants is figuring out the “what,” whereas FP&A is focused on the “why.” Accountants oversee the accurate record-keeping aspect of the business, while FP&A professionals examine and analyze said records. They’re two sides of the same coin.
How can they help grow your business?
With the unpredictability of the modern business world (COVID aside), an FP&A professional is integral to the growth of an organization.
If a business wishes to find success, it must manage its cash flow well, utilize its capital effectively, and thoughtfully plan its finances to meet the goals it set out to accomplish.
The FP&A role is even more important for publicly listed companies, as the organization must guide shareholders and investors as well. The financial analyses and reports of FP&A professionals may heavily influence a company’s share price.
To help you grow your business, FP&A will identify the desired outcomes of your organization. Whether that’s increasing revenues or reducing expenses is up to the company.
Then, the FP&A professionals will prioritize analyzing your current situation and taking note of your operating constraints. Are you understaffed? Do you have enough time on your hands? What about supplies?
After building an initial foundation based on the data gathered, an organization can use FP&A models to tweak its operations and will continually update the model itself as the business grows.
This process will increase your confidence in controlling your business, anticipating what may affect your cash flow, and adjusting operations along the way. In short, FP&A will equip you with the analytical tools and data that you’ll need to make strategic decisions.
How can you start implementing FP&A in your organization?
Implementing FP&A is easier said than done. Nevertheless, the challenges associated with FP&A have become less of a burden over the years thanks to technology, automation, and outsourcing.
While many companies use tools such as Microsoft Excel to perform FP&A, this method can only take you so far.
One of the best solutions to implement FP&A is to outsource it to an expert.
OR Reporting, for instance, can assign an FP&A expert for your company who will implement various FP&A models, technologies, and techniques to facilitate the strategic transformation and growth of your business.
With the help of our FP&A professionals, you’ll be able to discern which areas of your organization need improvement and gain a clearer understanding of your financial responsibilities and activities.
Learn more about OR Reporting’s services or contact us to create a customized solution for your organization.