The FP&A Trends Webinar: Digitised FP&A Business Partnering: The Formula for Success
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The FP&A Trends Webinar: Digitised FP&A Business Partnering: The Formula for Success
Click here to view details and register
By John Stretch, MD at Stretch Business Training
A British retailer recently announced plans to close over a hundred stores. Could part of the problem be an FP&A group whose ideas are outdated? The responsibility of FP&A extends far beyond forecasting and reporting financial numbers, to providing advice and insights into managing, nurturing, protecting and growing intangible assets such as customer and brand loyalty, as though they were tangible assets.
The modern-day FP&A function is challenged to drive a management system which controls all elements of an organisation’s performance. The system must be integrated: strategy, budgeting, forecasting, performance measurement, management reporting, incentive compensation and corporate governance, are all part of the process.
The FP&A group should be producing reliable business forecasts which anticipate changes in the economy, consumer behaviour and financial markets, and respond to strategic changes generated inside the business. Excellent financial reporting should be combined with non-financial metrics that capture the heartbeat of the business. In the retail industry these include customer counts, basket sizes, trading densities, departmental participations, units per employee hour, and inventory turn. Negative trends in these measures should trigger calls to action.
What are the rules for managing intangible assets? We can learn from winning companies and disruptors who applied these rules years before their competitors.
The article was first published in Unit 4 Prevero Blog
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