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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.
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
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 theFinance Business Partner Forum,which is part of the Business Partnering Institute's online community.
(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)
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 Bullsh*t Job
How Business Partners Keep A Plan On Track
Anders Liu-Lindbergis the co-founder and a partner at theBusiness Partnering Instituteand the owner of the largestgroup dedicated to Finance Business Partneringon LinkedIn with more than 10,000 members. I have ten years of experience as a business partner at the global transport and logistics companyMaersk. I am the co-author of the book “Create Value as a Finance Business Partner” and along-time Finance Bloggeron LinkedIn with 85,000+ followers and 155,000+ subscribers to my blog. I am also an advisory board member atBorn Capitalwhere I help identify and grow the next big thing in #CFOTech.
As an enthusiast and expert in financial planning and analysis (FP&A), I bring a wealth of knowledge and hands-on experience to the table. With a background in the global transport and logistics sector, particularly at Maersk, I've spent a decade as a business partner, navigating the complexities of finance and driving value for the organization. I co-authored the book "Create Value as a Finance Business Partner" and maintain an influential online presence with over 85,000 followers on LinkedIn and 155,000 subscribers to my blog, showcasing my commitment to sharing insights and expertise in the field.
Now, let's delve into the concepts presented in the newsletter article:
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Financial Planning and Analysis (FP&A):
- Definition: FP&A involves utilizing financial data to provide strategic insights, drive effective performance management, optimize current business operations, and contribute to future business growth.
- Skills Required: Proficiency in transforming raw transactional data into management reports, budgets, forecasts, and financial statements. Mastery of tools like Excel, along with the ability to leverage emerging technologies such as machine learning and automation for scenario planning.
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Making an Impact with FP&A:
- Driving Strategy: FP&A professionals leverage their numerical expertise to turn raw data into strategic insights. They communicate effectively with various business functions, ensuring data-driven and agile progress towards organizational goals.
- Performance Management: FP&A goes beyond simple financial benchmarks, offering deep insights into budget flexibility, external factors affecting performance, and alignment of operational goals with financial outcomes.
- Optimizing Today’s Business: Positioned to see the entire organizational landscape through transaction processing, FP&A identifies opportunities to optimize overall performance by bringing insights into the light.
- Growing Tomorrow’s Business: In a dynamic business environment, FP&A provides the agility to respond to change swiftly and seize emerging opportunities.
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Choosing an FP&A Career:
- Opportunities: FP&A career paths offer opportunities to make a significant impact on organizations by mastering skills such as extracting vital insights, effective communication with operational functions, and utilizing technology for scenario planning.
- Differentiation from Efficiency: FP&A professionals are distinguished by their focus on effectiveness over efficiency. They contribute to the business's impact rather than just executing tasks efficiently.
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Looking Ahead to the CFO Role:
- Journey from Financial Analyst to CFO: The article hints at a future exploration of the progression from a financial analyst to a Chief Financial Officer (CFO), suggesting that an FP&A background provides a strong foundation for ascending the corporate ladder in the finance domain.
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Additional Resources and Series:
- The author, Anders Liu-Lindberg, provides an extensive collection of articles and series covering various aspects of finance, business partnering, and FP&A transformation.
- The author also invites readers to engage in discussions by sharing their valuable insights and experiences in the comments section.
Anders Liu-Lindberg's credentials, including co-founding the Business Partnering Institute and contributing significantly to the finance community, underscore the depth of expertise and credibility behind the insights shared in the article.
