Error message

Image resize threshold of 10 remote images has been reached. Please use fewer remote images.

Inquisitive FP&A

By Karl Kern, Founder/President, Kern Analytics LLC

One of the more important qualities of FP&A practitioners is curiosity.  Curiosity, a strong desire to know or learn something, is affected by the types of questions asked.  It is the types of questions that determine how much FP&A practitioners want to know or learn.

One type of question is “what.”  The purpose of asking “what” is to acquire information.  Acquiring information can be in the form of financial numbers like revenues, expenses, and cash flows.  Acquiring information can be in the form of non-financial numbers like the amount of time companies receive or make payments.  Acquiring information can be in the form of qualitative data like comments from customers, names of products, or types of services provided.  Asking “what” helps FP&A practitioners know about the environments where they work but knowing is not enough.  FP&A practitioners need to ask questions that help them learn about the environments where they work.

One type of question that helps FP&A practitioners learn about the environments where they work is “how.”  The purpose of asking “how” is to acquire insight.  An FP&A practitioner can acquire insight into the production of products sold.  An FP&A practitioner can acquire insight into the promotion of products or services sold.  An FP&A practitioner can acquire insight into the administration of products or services sold.  Asking “how” helps FP&A practitioners learn about the actions within the environments where they work.  Learning about these actions can improve the work within FP&A but another type of question can drive the learning process further.

The type of question that helps FP&A practitioners go further to learn about the environments where they work is “why.”  The purpose of asking “why” is to acquire reason.  An FP&A practitioner can acquire reason for selling products to one customer versus another.  An FP&A practitioner can acquire reason for having consultants versus employees.  An FP&A practitioner can acquire reason for raising money through equity versus debt.  Asking “why” helps FP&A practitioners learn about the actions within the environments where they work through the intentions of others.  Once intention is identified FP&A practitioners can focus on relationships between the rewards that are sought, e.g. revenues and cash receipts, and the effort being made to receive these rewards, e.g. purchasing merchandise and using social media.

Having a strong desire to know or learn something, curiosity, is perhaps the most basic quality of FP&A practitioners.  Developing financial plans and assessing financial health are tasks best suited to those who are curious.  What determines the quality of these tasks is how curious people are and that is determined by the types of questions asked.