Defining exactly what Financial planning and analysis (FP&A) does has always been tough.
Most people place FP&A in the Office of the CFO, and that makes sense, for many of us have certainly played the role of CFO a time or two, but as business partners, strategists and advisors, that is also not necessarily a perfect fit and as our roles continue to expand to become the central hub of corporate analytic and reporting this categorization may change.
According to the recent survey by the Argyle Forum, 40% of the companies that are looking to transform their FP&A model stated that increasing collaboration between the finance team and other departments is the most common end goal. Why is that? Is it because when Finance is involved, better decisions are made, costs are controlled and growth initiatives are enacted? Possibly?
by Michael Coveney, co-author of "Budgeting, Planning, and Forecasting in Uncertain Times"
There are many software products that claim to support CPM, but often they only support some aspects, for example, financial planning, and reporting. One of the issues is that the term CPM is synonymous with budgeting, forecasting and management reporting which by itself cannot provide a complete solution.
Similarly, some vendors have multiple products covering different parts of CPM. For example, many have a scorecard application that they deem suitable for strategy management; a separate solution for collecting budgets and forecasts; and yet another for reporting and analysis. In the context of this framework, these multiple solutions can only work if they are truly integrated and can be made to operate as a single system. Without this level of the integration, system maintenance becomes an unbearable nightmare that cannot suitably adapt to the dynamics of the economic environment.
This article gives an overview of 9 key areas that should be considered for the overall evaluation of CPM/ FP&A system.
This article addresses technology in FP&A.
In his book "THE INNOVATORS" Walter Isaacson describes two ways of utilizing technology. One way is artificial intelligence, machines thinking on their own. Another way is augmented intelligence, people using machines to help organize information. Both ways are seen as improvements in our ability to make better decisions. The ability to make better decisions is an important part of FP&A.
I see artificial intelligence in FP&A.
By Gary Cokins, Founder and CEO: Analytics-Based Performance Management LLC
A paradox which continues to puzzle me is how chief financial officers (CFOs) and controllers can be aware that their managerial accounting data is flawed and misleading, yet not take action to do anything about it.
Now, I’m not referring to the financial accounting data used for external reporting; that information passes strict audits. I’m referring to the managerial accounting used internally for analysis and decisions.
Randall Bolten , longtime Silicon Valley CFO, author of "Painting with Numbers: Presenting Financials and Other Numbers So People Will Understand You” and adjunct professor at U.C. Berkeley Extension
In recent posts we’ve seen how tiny changes in the way we present numbers can have a huge impact on how well the information is understood. In this post, we look instead at how those little things can affect how your integrity or your ethics might be perceived.
For our example, consider a slide from an investor presentation I found online (click here for the original document). Just for the record, the company (Constant Contact – Nasdaq: CTCT) looks at first glance like a perfectly fine company; I’m only commenting on how they present some of their information.