There is a big challenge and multiple questions of how in the area of cooperation between FP&A teams and other teams within the organisation. The below article summarises an approach developed throughout the years of my work and explores ways to fully integrate FP&A with other divisions and remove barriers in cooperation. 

Corporate Culture Can Be One of the Barriers

The core idea of FP&A Business Partnering is to support the organisation with the skills the other teams don't have. The list of unique strengths that FP&A have goes as follows:

• companywide access to all data
• analytical capacity
• big picture perspective
• ability to present businesses it in financial framework
• ability draw conclusions for whole organization.

Many FP&A professionals experience hesitation in cooperation with other teams. FP&A is often seen as a control mechanism rather than a support mechanism. In order to succeed, this barrier requires careful handling.

In one of my roles, I have observed CEO firing Head of Controlling (responsible for FP&A) because the forecast was wrong by a significant amount. It happened due to renegotiation of the contract with the main supplier two days before the forecast submission. Although CEO claimed that reporting all actions to the Head was not organization responsibility, I think that the forecast was not accurate due to faulty organizational cooperation culture.

FP&A has many functions among which laying out the optimal business scenario is the most important one. This cannot be accomplished without a thorough understanding of the areas that are being analysed and forecasted. 

Diversity Can Be a Challenge

It is important to understand two things. Firstly, information is power, and if it is in wrong hands, it can be utilized against another party. Therefore, other teams might see cooperation as a problem and would rather avoid it or limit it to the necessary minimum. In the end, they can dodge responsibility and easily blame budgets or forecasts.

Secondly, organisations need people of many skills. Artistic touch, human skills, intuition, vision, to just name a few, are in contrary to analytical skills and clockwork universe idea. The first step is to understand them, the second to accommodate them and communicate on the same level.

The big question is how to make it work, then. Let’s have a closer look at cooperation with Sales Team.

To build a great cooperation culture and to become Business Partner, the following steps can be taken:

1. Get the historical data organized
2. Build transparent forecasting models
3. Involve and invite over for mutual collaboration
4. Discuss the forecast draft
5. Present the results

Get the historical data organised

I find it very important to understand the business as is. The organisation usually records vast amounts of information. If controlling and forecasting teams are not in place, this information remain mostly standalone. When they become aggregated, reconciled and presented in a simple way, the operational/financial picture of the business appears. That is the starting point. Values, trends, ratios, one-offs, performance all become clear and nothing old will be missed. 

Build transparent forecasting models

After the foundation for the forecasts is established, the next step is the forecasting model. It is better to go as detailed as possible, but yet keep it simple at the point of interaction with other teams. The analytical skills of FP&A professionals might easily go too far and the communication link with non-finance colleagues might be lost. 

I would suggest explaining the approach taken and verifying that the analytical approach aligns with their business understanding. It is very important to verify the numbers with other internal reports. It is a good idea to present it as a story supported by the key business drivers, values, ratios, dependencies. 

Make sure other teams understand definitions used. Orders, shipments, revenue recognition, receivables, payments terms, FX gains or losses might be obvious to FP&A professionals, but not necessarily to operation teams. A good FP&A professional guides them through. It is important to focus on getting the information needed and not to teach them another profession. 

At this point, trust can be established. The information is out, available for everybody, accurate, presented in an agreed-upon way and its utilization is transparent. The non-finance colleagues feel they are in the good hands.

Involve and invite over for mutual collaboration

I find this step most important for getting forecasts accurate. If the models are prepared correctly, it takes minimal time to feed it with relevant information. 

In the previous step, both Teams should agree that the approach is correct. Now, it is just a matter of obtaining Sales Team view on the future. To do this, the FP&A Team Leader should schedule the meeting, inform up front what will be discussed, what supporting documents are needed (such as orders, contracts) and invite sales colleagues to complete this task together. 

I would recommend starting with baseline and asking for amendments. It is a good idea to challenge them, yet closely listen to their comments. It can be overwhelming, thus you can write them down on the side. It is also important to ask questions about the missing pieces of the puzzle. Usually, Sales Teams underestimate costs of the business. Make sure they get the staff, marketing materials, advertising funding planned to reach their targets and do not forget to ask them for their sales initiative’s ideas (revenues, costs, timing). At such meetings, I try to see the big picture as much as possible, connect all the dots, cross-check with them.

At this point, a partnership can be established. Both teams keep focusing on their objectives, yet these objectives present themselves as aligned. Understanding the challenges of the business, discussing ideas, caring for smooth execution – all this shows to the other party the main goal is not to supervise but to support.

Discuss the forecast draft

Now it is time to let the sales colleagues know that work done by FP&A doesn’t go behind their back, and when polished, it will be sent for their review and sign off. 

As FP&A teams spend months or longer to develop the full model, it cannot be reviewed in minutes. Therefore, it is better to provide a management summary instead.
An FP&A Team Leader should also stress the point and make it clear that the assignment purpose is to connect the dots in the organization and see the possible outcomes far ahead, to ensure smooth execution of the plan and prevent the whole organisation from unaccounted obstacles. The sales, marketing, production, logistics, warehousing, IT, back office, funding, debt covenants, hedging, corporate structure, taxes, regulatory and legal matters, investors… all have to be accounted for, and this relies on FP&A Team. 

At this point, FP&A becomes a leadership function. FP&A takes responsibility to aggregate all information in the complex plan, agree with organization senior leaders and communicate it properly to other teams.

These steps can be simplified in the future, as the organization will train itself and develop know-how in providing the information to the FP&A team. The quote of Benjamin Franklin fits here:

“Tell me and I forget, teach me and I may remember, involve me and I learn.” 

Although, the organisation can move later-on to communication via spreadsheet, I always believed that accuracy is the main objective of FP&A and thus verification of provided data requires again… communication. A good analyst at this point can also spot challenges or opportunities that other teams might have and engage in analytical support in the later stage.

Present the results

During the executive board meetings, while this approach was in place, I always get impressed how much time was invested into the discussion of the company future and how little was utilised into the discussion about the presented approach, data accuracy, or each parties’ responsibility. 

In order to build effective cooperation with other teams, I think it’s important to account for two things:

• Supervisory feeling that can be mitigated and changed into partnership. 
• Different skills set and communication approach, that requires elasticity and outgoing approach.

In the article, I have also mentioned a few tips that can help ensure a smooth cooperation with other teams:

• Prepare yourself and ask for cooperation instead of requesting stuff to be done for you
• Help other teams to see the whole picture and fill the blanks together
• Try to understand and dig into the challenges of your non-finance colleagues and help them accomplish their targets
• Do not request to communicate in finance language, facilitate for differences