FP&A Trends

By Neil Ainger, GTnews

At one of the previous meetings, The London FP&A Board addressed the technological requirements needed for effective FP&A. The well-known Chatham House anonymised rules were deployed to encourage a full and frank debate.

The board members agreed that technology (like any tool) is only as good as people’s ability to use it and to apply it for business benefit and the discussions about the key requirements of an FP&A system got underway.

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.

By Michael Huthwaite, Founder and CEO at FinanceSeer LLC

The long-standing narrative of Enterprise Performance Management (EPM/CPM) has been squarely focused on the effort to steer organizations away from spreadsheets by embracing Enterprise Performance Management suites (i.e. platforms).  
Yet, the dirty secret that is rarely spoken about is that most organizations continue to remain heavily reliant on spreadsheets even after spending huge sums of money on EPM solutions.  
So, why are so many organizations still deeply dependent on spreadsheets?  The answer to this question lies at the Edge.  

By James Myers, Global Finance Executive and Finance Transformation Consultant

It’s the middle of the year and it’s time to take charge of your “data destiny” before the budgeting and planning season starts. What exactly is your data destiny? No, it’s not the new Netrunner card game where the objective is to control all the data in the Universe.

It’s understanding how you can leverage all your internal and external financial and operational data to give you a strategic advantage. Relevant data is the key to understanding it all, but too often this is disbursed throughout your organization. 

By Rob Trippe, MBA, Financial Modelling Veteran

Many sophisticated business environments use budgets as a bridge between actual and forecast. Within the corporate finance domain, budgets are used to allocate resources and provide a starting point for current and future period estimates. Budgets and revised budgets are often communicated to shareholders and the investor community in numerous ways such as earnings estimates and road show presentations in the form of a “current estimate”. The budget becomes a foundation for expectation.