Before I start on the role of FP&A, let me add a little bit of history to the Finance organization. Traditionally, Controllers have risen to the CFO roles and the focus has primarily been on closing the books. Accounting typically looks at past events and is concerned with GAAP and tax compliance, FP&A on the other hand is concerned with future events with a good grasp of past events. Most business leaders see FP&A professional as someone, who comes out of the woodwork once a month and hammers them with a performance report. FP&A has been relegated to the role of creating budgets and providing reports but that is changing fast.
FP&A personnel also need to work in changing the mindset of CEO’s and management. However, it still remains the prerogative of the CEO and CFO to decide FP&A’s role.
FP&A cannot be thought of just financial instead it should is both financial and strategic.
These are the overarching goals of an FP&A organization
These are some of the ongoing responsibilities of an FP&A organization.
Creating Strategic Plans Let's start here. FP&A is responsible for creating budgets, long-range strategic plans and reporting. However, for most organizations the buck stops here and the rest is ignored.
Business Partnership FP&A through its in-depth knowledge can work with business leaders and enable them to reach their short-term strategic and operational goals.
Business Analysis FP&A should work seamlessly with the business, charting the risks and opportunities to shape the firm’s strategy
A fully integrated FP&A is one in which every functional leader works with the FP&A organization in understanding repercussions of every major step.