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.
Financial planning and analysis (FP&A) educational and consulting company the FP&A Trends Group has rebranded the London FP&A Club as the London FP&A Circle. The change was marked by the launch of the FP&A Circle the 4th of July 2016 on board the historic warship HMS Belfast (pictured above), which is permanently moored on the River Thames in London. The event was sponsored by FP&A technology group Prevero.
Cost Accounting provides insight into the relationship between financial sacrifices and financial benefits. There are a number of elements within this discipline that support this relationship. FP&A stimulates thinking about activities that create sacrifices in order to create benefits. These activities develop a framework for understanding what organizations are doing and where they are going. The question is: which element of Cost Accounting develops a meaningful framework that links activities to understanding?
by Michael Coveney, co-author of "Budgeting, Planning, and Forecasting in Uncertain Times"
CPM is concerned with the way in which an organisation manages its overall performance. As defined by Gartner it involves combining the methodologies used to manage strategy, the metrics that evaluate performance and the processes used to direct people within the organisation – all of which should be supported by a technology solution.
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?