FP&A Models

Analytic Model Vs Spreadsheets

by Michael Coveney, co-author of "Budgeting, Planning, and Forecasting in Uncertain Times"

Spreadsheets are without doubt the ‘killer’ application that turned the PC into an indispensable business tool. Before then, computing was the preserve of geeks and specialists who spoke in a language few accountants could understand as they served expensive, inaccessible machines locked away in their own air conditioned environment.

20 Key Financial Modelling Definitions

By Rob Trippe, MBA, Financial Modelling Veteran

Financial model definitions can be tricky. Financial models are often dependent upon numerous functional areas and academic disciplines, such as accounting, finance and statistics. These disciplines may have differing uses of the same terminology. Model risk management has also drawn on numerous disciplines in its evolution. The result can be communicating at cross purposes.

No one academic discipline may lay claim to how a financial model’s terminology is defined. Financial model's output is often either a corporate finance concept or an accounting concept, while a driving calculation process may be statistical. Therefore, terminology should be defined among developers, owners and users as early as possible.

London FP&A Board: FP&A Analytics Maturity Model

By Larysa Melnychuk, Managing Director at FP&A Trends group

Introduction

The future is unpredictable, the current business environment is harsh, competition is fierce. In these times of change, modern FP&A is both exciting and challenging. It is exciting because it utilises better and more sophisticated tools than previously, can embrace automation and the incredible power of online collaboration. However it is difficult because old finance management practices are still alive: they are inadequate for the modern world, but FP&A professionals continue to live from a deadline to a deadline and have no time to stop, change, re-write, and reconsider.

Analytical transformation reduces finance departments’ costs. e.g. robotics and automation, shared services, centers of excellence have already processes of many finance departments. But what about FP&A? In many cases, it still lives in the 20th century. It is a well-known fact that Excel continues to be the prevalent analytical tool used by finance professionals. The quality of data for FP&A analytics remains poor and the FP&A time wasted on the data reconciliations and cleansing. The financial analysis task thus takes on the form of “firefighting”, leaving no time to re-think and re-design the existing non-value adding processes.

Seven Key Dimensions of CPM Business Model

by Michael Coveney, co-author of "Budgeting, Planning, and Forecasting in Uncertain Times"

The central CPM business model requires multi-dimensional technology. Whether this is an OLAP or ROLAP database is irrelevant, however, the members that make up each dimension will need to be assigned ‘attributes’ that will allow them to be reported and analyzed in ways other than their physical structure / hierarchy within the model. 
The CPM business model will typically consist of 7   key dimensions that are described in this article.

FP&A: the Evolution of Driver-Based Planning

By Larysa Melnychuk and  Hans Gobin 

Driver-based planning (DBP) is an essential part of the financial planning and analysis (FP&A) armoury, enabling organisations – ranging from the smallest non-profit to a multinational – to become quicker, more dynamic and agile in their planning and in responding to internal and external changes in the business environment.
DBP was the focus on the London FP&A Board of senior practitioners’ most recent meeting, sponsored by Michael Page and Metapraxis, which was held on the eve of the landmark UK referendum on its continued membership of the European Union (EU). Given that the result early on June 24 confounded many expectations, the benefits of DBP may have been evident to many companies forced to reassess both their short-term and longer-term business plans.

This article outlines the main conclusions and recommendations on DBP that were generated by the London FP&A Board.

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