How do you measure the success of an FP&A team?

FP&A professionals provide strategic view for management to create decision both short term and long term. FP&A professionals should act as a business partner to management to help them stick to company's goals. FP&A roles are divided into two point of view: 1. Historical : variance analysis, management reporting, narket updates, and other performance analysis 2. Future : forecasting, budgeting, and long-term planning. To perform those roles properly, FP&A professionals need to learn essential skills like accounting, business acumen, storytelling, financial model, and technology knowledge. Moreover, FP&A should build relationship with all users to ensure smooth updated information flow.

The role of FP&A has evolved significantly, continuing the trends that have been shaping the field over the past few years, it’s becoming increasingly more strategic and forward-looking. To stay ahead of the curve and keep adding value to their organisations and fostering business success, FP&A professionals need to broaden their knowledge and competencies in areas like data analysis, data quality, BI, and risk management.

While the role of FP&A has expanded over time, the core FP&A process includes building budgets and forecasts, analyzing variances and recommending course corrections, building financial models and scenarios to aid decision-making, and tracking metrics and KPIs for knowing the state of the business.

The role of FP&A Teams has evolved from descriptive, to predictive, and now to prescriptive analysis, to drive the achievement of corporate objectives, in partnership with strategical and operational leaders. The functional, technological and personal skills of FP&A teams are transforming towards data driven decision drivers, business experts with a top-notch acumen, and architects of collaborative relationships throughout the enterprise.

While the FP&A role has grown, it is still important to still understand its core process including budgeting, variance analysis, financial modeling for decisions, and tracking KPIs.

Excel is still the most commonly tool used in FP&A due to its familiarity and flexibility. However, to tackle some of the core challenges in FP&A, teams should look to move away from excel and adopt modern planning and reporting platforms. This should be the first step in modernizing your FP&A function.

In the dynamic world we live in, on top of common challenges, FP&A teams must be quick and responsive, swiftly pinpointing and adapting to any fluctuations in internal procedures or market trends that could impact their financial results. This requires reliance on automated processes and a flexible approach.

Maior desafio da área é sempre entender bem o produto produzido e todos os níveis de custos e despesas da empresa, somente mediante o entendimento, é possível saber onde priorizar para maiores ganhos.

Using Excel for Financial Planning and Analysis (FP&A) instead of a dedicated Enterprise Performance Management (EPM) tool comes with hidden and explicit costs that can significantly impact an organization's efficiency, accuracy, and decision-making capabilities. For example consolidating financial data across different departments or business units with Excel can be cumbersome and prone to errors, compared to streamlining consolidations through automation and standardised processes lead to delays in decision-making, impacting opportunities for growth or cost savings.

Les défis de la FP&A résident dans la nécessité de jongler avec un environnement financier en constante évolution tout en fournissant des informations précises et opportunes. Cela implique de naviguer dans des données souvent complexes et volumineuses, de s'adapter à des exigences réglementaires changeantes, et de relever le défi de la prévision dans un contexte d'incertitude accrue. De plus, la collaboration interfonctionnelle et la communication efficace avec les parties prenantes clés sont essentielles pour relever ces défis avec succès.

A transformação digital e automação são realmente ferramentas importantes no percurso. Mas, ao meu ver, ainda se faz necessário ter o olhar humano para o que somente a análise de cenários e contextos podem trazer para FP&A.

Organizations that fail to incorporate advanced analytics, AI, and automation into their FP&A processes risk falling behind competitors who leverage these technologies for deeper insights and faster decision-making. As the business environment becomes more data-driven, FP&A teams that do not utilize emerging technologies might find their analyses and recommendations less relevant to strategic decision-makers.

La FP&A, ou planification financière et analyse, est chargée de fournir des informations financières stratégiques, des prévisions et des budgets pour aider les décideurs à planifier et exécuter leurs stratégies. Les défis comprennent la gestion de données complexes et l'adaptation à un environnement financier en constante évolution. Les tendances actuelles incluent l'utilisation croissante de l'analyse prédictive et de l'intelligence artificielle, ainsi que l'intégration de données non financières pour une analyse plus holistique de la performance de l'entreprise.

Numerous key performance indicators (KPIs) traditionally gauge the success of an FP&A team. However, beyond these metrics lies a crucial determinant: the team's synergy with business partners to foster company growth. FP&A, equipped with a deep understanding of historical data, actual performance, and target goals, possesses the capacity to offer actionable insights, bolster strategic decision-making, and enhance collaboration throughout the organization. This collaborative prowess ultimately defines the success of FP&A teams.

Metrics of FP&A depends on type of business and maturity of the company as well. So the most important things for FP&A is complete understanding of the business they support. For the most rapid growing company like startups, agility is the main target of FP&A. Management can change the metrics rapidly, change the assumption to meet to ensure product-market fit, etc. Users's satisfaction, availability of insight, and report innovation are main target of FP&A for this type of business. For mature business with stable assumption, report accuracy, complete and holistic analysis, budget and forecast accuracy, and reporting technology innovation are main targets for FP&A.

Entendo que uma das maiores métricas do FP&A são as análises de variações do resultado contra o planejado. Se a variação da receita está vindo de aumento de volume ou de preço, ou se a margem está maior pelos custos estarem menores.

Les métriques de FP&A sont cruciales pour évaluer la performance financière et opérationnelle d'une entreprise, allant au-delà des indicateurs traditionnels pour inclure des mesures telles que le retour sur investissement et la satisfaction client. En intégrant ces métriques financières et non financières, les équipes FP&A fournissent des insights stratégiques essentiels pour guider la prise de décision et maximiser la valeur pour l'organisation.

From my prior experience, I share the following gems: One, ask for feedback from business partners. Two, a post-mortem analysis after the budget process is complete is beneficial. Such analysis can cover: "what worked", "what did not work", and "what can we do better". Three, spend a day physically with your business partners and their teams. For example, if you are providing finance support to sales teams, request that you be part of their weekly meeting once a month. Four, document key FP&A processes and cross-train team members on key reports and processes.

Best practices can be industry specific but generally speaking, high level of accuracy, business partnering, and offering strategic support are key to help the FP&A team perform

Providing some easy to use tools to your business partners to enable them to start thinking on various scenarios and impact of their decisions. This helps both you and your business partners. This also encourages proactive dialogues leading to better performance both qualitative and quantitative

As organizações que trabalham com gerentes ativamente alinhados ao setor de FP&A, envolvidos desde a confecção do orçamento até acompanhamento dos resultados, conseguem maior engajamento e resultados.

Les meilleures pratiques de FP&A comprennent une expertise financière solide, l'utilisation efficace des technologies et une communication interfonctionnelle. Cela implique une modélisation financière robuste, une analyse approfondie des tendances et une collaboration étroite avec d'autres départements. L'adaptabilité aux changements de marché et l'agilité des processus sont également essentielles pour rester efficaces dans un environnement en évolution. En intégrant ces pratiques, les équipes FP&A peuvent jouer un rôle stratégique dans le succès global de l'entreprise.

FP&A has a bright future ahead of it that could lead to major improvements in how businesses run as a new era of digital transformation has begun. There is a bright and promising future for FP&A. Being in the industry now is exciting because there are lots of chances for professional development. FP&A will be essential in helping businesses succeed as they develop and adjust to the ever-changing environment. However, it's essential that business executives accept and welcome this shift.

Think of FP&A as the CFO's SWAT team, which is entrusted with the most challenging analyses, ad hoc reporting, and fire-drill requests.