FP&A basics for finance professionals
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FP&A basics for finance professionals

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Financial Planning and Analysis offers great opportunities for a long-term and rewarding career, but what exactly does it involve? To pick a career, you need to know what you are choosing. 

The foundation skills are standard fare. As finance professionals, all FP&A practitioners know their way around taking the raw material of transactions and turning these into management reports, budgets, rolling forecasts, and financial statements. They’re a whizz with Excel, efficient in processing, and comfortable with the numbers.

That doesn’t sound like fun. We want more.

FP&A takes all of these skills to the next level. In an FP&A career, finance professionals learn to create value, making finance effective and impactful, not simply efficient. They know how to make money for the business, and drive new and vital insights from analytics. FP&A takes the holistic overview afforded by processing all the transactions of the business to develop a cross-value chain perspective on the company, fostering collaboration between functions and creating the best possible solutions to business challenges.

Does that sound more appealing? Let’s dive deeper into how FP&A makes an impact on the company.

Making an impact

FP&A can drive the right strategic choices in the company, influence effective performance management, optimize the existing business and grow tomorrow’s business. How do they do it?

Driving Strategy: There’s no one better with the numbers than finance. FP&A turns raw data into strategic insights, communicates these effectively to peers in other business functions, and partners with decision-makers to ensure that the organization's progress towards its goals is data-driven, holistic, and agile.

Performance Management: Financial benchmarks are the easiest metrics for evaluating performance across every function. Production managers may be judged on their contribution to overheads, and sales staff on their revenue generation. But raw data is not enough. FP&A has the depth of insight required to understand how a budget may be flexed, how external conditions can change the picture outside of a manager’s control, or whether a single sales figure represents deals that truly align with the operational goals of the business.

Optimizing today’s business: FP&A is in a unique position to see everything that happens in the organization through the lens of transaction processing. When the sum of the parts is less than the whole, it’s more obvious to finance than to individual functions who are each following their own path. Bringing those insights into the light helps to optimize the performance of the whole organization as a coherent unit.

Growing tomorrow’s business: In a world where the only constant is change, businesses must be able to respond quickly to new conditions. FP&A provides the agility to react to change and grasp opportunities as they arise.

Finance professionals who have chosen the FP&A career path are in a unique position to make an impact on the organization and grow with the business.

Taking the plunge

The opportunities offered by an FP&A career make the choice a simple one.  Let’s summarize the basics that have to be mastered.

  • Take the raw material of transactions and extract vital insights into what’s driving performance.
  • Develop the skills needed to communicate effectively with all the operational functions of the business, so that management reports help people to manage, not snooze through your reports.
  • Harness those spreadsheets and emerging technologies such as machine learning and automation to deliver strong and reliable scenario planning for agility and responsiveness.
  • Don’t confuse effectiveness and efficiency. Anyone can carry out their tasks efficiently, but we look to FP&A professionals to be effective and make an impact on the business they are in.

In our next blog, we’ll look closer at the journey from financial analyst to CFO. What have been your most valuable skills for building your FP&A career? Let us know in the comments.

This was the second article in my latest series "Charting the course of a successful FP&A career". You can read the previous article(s) below.

Charting the course for a successful FP&A career

While you await future articles you can read my latest series "Planning (as we know it) is dead!" below.

Planning as we know it is dead. Long live... WHAT?

A history of planning: How did we get here?

A review of the contenders for the planning crown

Enter the new paradigm for planning

A planning approach fit for the next normal

FP&A perspectives from the frontline

Planning in the real world

Can we trust the machine for financial planning and analysis?

You can read a lot more articles about FP&A, Business Partnering, and Finance Transformation below. It all start's with “Introducing The Finance Transformation Nine Box” where you set the ambition for your transformation. You should join the Finance Business Partner Forum, which is part of the Business Partnering Institute's online community.

The secret sauce of FP&A transformation (the last article in the series "FP&A Transformation Talks")

How Finance should use its seat at the table (the last article in the series "The Unfair Advantage of Finance")

The ultimate guide to decision-making for finance professionals (the last article in a series about the decision-making process and how Finance should impact it).

The Mindset Change Checklist For Finance Professionals (the last article in a series about the mindset change that finance and accounting professionals should make to become business partners)

It's Time To Decide If You Want To Be A Business Partner (the last article in a series about the personality traits of business partners)

All Successful Business Partners Are "Leaders" (the last article in the series about our new capability model)

Should We Keep Talking About Business Partnering? (part of a 17-article series where we deep-dive into the WHY, WHAT, and HOW of business partnering by putting it on a formula)

Your Journey To Successful Business Partnering Explained

How To Create Value Through Business Partnering

Everyone Can Adopt A Business Partnering Mindset (part of a six-article series about FP&A Business Partnering)

From Business Partner To Working Within The Business (part of an article series where I interview finance professionals about their careers in FP&A and Business Partnering)

Is Your Product Optimized For Value Creation? (part of a toolbox series where we look at what tools FP&A professionals should leverage to drive value creation)

How Business Partners Turn Analysis To Insight (part of case study series where I interview business partners about how they drive value creation using real cases)

The Future Of FP&A: Two Ways To Take The Reins

What Is The Accounting Profession Paradox?

What Defines A Finance Master?

The New Career Path For Finance Professionals

How Finance People Can Be More Successful

The CFOs Roadmap To Transforming Finance

How To Become A Finance Business Partner

Financial Analyst vs. Finance Business Partner

Finance Business Partner Is A Bullshit Job

How Business Partners Keep A Plan On Track

Anders Liu-Lindberg is the co-founder and a partner at the Business Partnering Institute and the owner of the largest group dedicated to Finance Business Partnering on LinkedIn with more than 10,000 members. I have ten years of experience as a business partner at the global transport and logistics company Maersk. I am the co-author of the book “Create Value as a Finance Business Partner” and a long-time Finance Blogger on LinkedIn with 85,000+ followers and 155,000+ subscribers to my blog. I am also an advisory board member at Born Capital where I help identify and grow the next big thing in #CFOTech. 

Chris Ortega

Fractional CFO 👉🏾 I help SMBs lead with Financial Clarity & Confidence | Founder & CEO @freshfpa | FP&A, Finance & CFO Thought Leader | Finance Influencer | Former Amateur Boxer 🥊

2y

Anders Liu-Lindberg I love your point on making an impact inside your role and team. That is so important and expanding your reach. Also, you provided a ton of article resources inside this that is very helpful and insightful. Thanks for sharing!

Zia Rezvi

Compliance Project Manager | GRC Consultant | Growth Mindset Career Coach | Data Analytics Mentor | Start-up and Non-profit Advisor | Scrum Master | ACMA | Passionate about Personal Knowledge Management!

2y
Anna Oblakova, PMP®, PhD

📍 Follow me for insights on FP&A | Finance Business Partnering | Finance Transformation | Strategic Finance

2y

Anders, I completely agree with your point about the unique position of FP&A in the company. It is both knowing the details about what's going on and the ability to build the entire picture based on these details which put FP&A in the center of the organization. It is extremely important to leverage this position to create value by pointing out inefficiencies and supporting opportunities for growth. Thanks for this great post.

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