Skip to main content
Home
The Online Resource for Modern FP&A Professionals
Please register to receive the latest FP&A news, updates and tips Login

Main menu

  • Home
  • FP&A Insights
    • FP&A Trends Digest
    • FP&A Trends Research
    • FP&A Trends Insight Paper
    • FP&A Trends Survey
    • Short Videos
    • Our Contributors
  • FP&A Events
    • International FP&A Board
    • FP&A Trends Webinars
    • Digital FP&A Circles
  • AI/ML Committee
    • Introduction
    • Members
    • Resources
    • Meetings
  • FP&A Tools
    • FP&A Trends Maturity Model
  • About Us
    • Company Policy
    • Privacy Policy
    • Editorial Guidelines
    • Our Ambassadors
    • Our Sponsors & Partners
    • Contact Us
image
How to Leverage FP&A into the Business?
August 6, 2021

By Richard Reinderhoff, CFO/FP&A Expert and Independent Adviser

FP&A Tags
Financial Planning and Analysis

analyticsIf there is no financial planning, there is no financial control. Since financial planning and analysis (FP&A) is connected to all departments within a business, its fiduciary duty is to secure the realised value. There are three areas where the quality of financial planning can be leveraged to maintain this value. Understanding each area will help manage real business risks and improve financial control.

1. Accounting information

Within the organisation accounting information is the main source of information for FP&A. What information is the ‘accounting’ system producing? In an ideal scenario management receives sufficient information to manage the business well: 

  • A production efficiency report (or key performance indicator [KPI] report) and a cost analysis report should be available. It is not only production companies that benefit from this, but also those selling services since it is all about the ‘engine’ of the business. 
  • A balance sheet and income statement should be available monthly. In some countries, a signed version should be ready for a supplier to credit check the company. 
  • A cash flow forecast is another report that is important, even if it is just to limit the amount that family members withdraw from the company. 

Due to a series of scandals and mismanagement at large corporations, new legislation was introduced e.g. Sarbanes-Oxley (SOX). Today, there is enough good practice to make sure that forward-looking statements are solid enough for external publication.

fp&a

With accounting information, FP&A should be able to understand the operations and learn about its development to avoid making basic management mistakes. One company would not have built up too much inventory, leaving it cash funds low during a surprise change in demand. In another case, a company was selling at a loss because the chief engineer did not want finance to verify the product cost calculations.

2. Responding to change

From the outside, many subjects impact directly or indirectly the financial results of the company. How well does the company adapt to its environment? You want to know how effective management is when dealing with a business environment that keeps changing faster and faster. For example, when factors move in any of the following areas. Competitive, political, economic, social, technological, environmental, legal, cultural. There are a few key questions to answer that will help quickly verify the adaptability of the company.

fp&a

Responding to change means managing risks. That is why companies that are top-of-their-class have finance involved in identifying risks and defining their impact on the P&L. There is always a chance that a new competitor drives the price down or enters a public bid below cost in an effort to simply gain market share. Once, a financial director of a reseller company warned the group CEO of a possible local growth slowdown, which actually happened. In this case, the global supplier was building up stock because the final customers in their key market had all started delaying expansion plans.

3. Financial function

Strong financial leadership will balance internal information with the external events that are impacting the financial results. How strong is the financial position within the business? This question is extremely normative and difficult to underpin because it involves people. At the core is decision making. Finance is supposed to question and argue for or against any major decision at the time.

 

fp&a

This checklist will not guarantee that decision-making or change in business focus is always timely, but it does help to identify possible blind spots. In one situation, an intercompany loan in USD almost made a local go bankrupt because the head office treasury was not aware of an increase in the exchange rate. In another company the finance team instigated a change in business focus away from multi-million telecommunication contracts, that made a near-zero profit margin, to small industrial deals, that offered advanced payments and profit.

What can FP&A do?

To improve the quality of financial planning, FP&A will have to develop better services:

  • Accounting information: Achieve best-in-class products and invest in analytics.
  • Responding to change: Improve profit predictability and develop organisational agility.
  • The finance function: Roll out finance business partnering and learn from other industries.

When these FP&A services are leveraged into the financial planning cycle, the company will be less vulnerable to competitors and management will be less pressured by its peers into making poor decisions. As such, company value will be preserved.

 

The article was first published in Unit4 Prevero Blog.

The full text is available for registered users. Please register to view the rest of the article.
  • Log In
  • or
  • Register

Related articles

fp&a
Maintaining the Relevance of FP&A in Changing Times
June 16, 2021

Irrespective of the industry you work in, I am sure all of you would have noticed...

Read more
intelligent FP&A
Formula for Successful Deployment of Intelligent FP&A
April 27, 2021

In this 7-minute presentation, Rodolphe Aubin argues that FP&A transformation should be seen as an opportunity...

Read more
fp&a
How Companies May Use Systems to Improve FP&A Processes
April 22, 2021

Companies nowadays are looking at using specialised FP&A solutions to help improve the accuracy and efficiency...

Read more
Value creation
Value Creation and FP&A: The DuPont Analysis
September 8, 2020

This article is about a basic understanding of main value creation concepts and how those impact...

Read more
+

Subscribe to
FP&A Trends Digest

We will regularly update you on the latest trends and developments in FP&A. Take the opportunity to have articles written by finance thought leaders delivered directly to your inbox; watch compelling webinars; connect with like-minded professionals; and become a part of our global community.

Create new account

image

Event Calendar

Pagination

  • Previous
  • May 2025
  • Next
Su Mo Tu We Th Fr Sa
27
28
29
30
1
2
3
 
 
 
 
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Transforming FP&A Together: Human & AI Synergy
 
18
19
20
21
22
23
24
Moving from FP&A to Extended Planning and Analysis (xP&A)
 
Five Critical Roles for Building a World-Class FP&A Team
 
25
26
27
28
29
30
31
FP&A Business Partnering and AI: A New Era
 
All events for the year

Future Meetings

The Face-to-Face Amsterdam FP&A Board
The Face-to-Face Amsterdam FP&A Board Transforming FP&A Together: Human & AI Synergy

May 15, 2025

The Face-to-Face Milan FP&A Board
The Face-to-Face Milan FP&A Board Moving from FP&A to Extended Planning and Analysis (xP&A)

May 20, 2025

The Face-to-Face Frankfurt FP&A Board
The Face-to-Face Frankfurt FP&A Board Five Critical Roles for Building a World-Class FP&A Team

May 22, 2025

BPAI
The FP&A Trends Webinar FP&A Business Partnering and AI: A New Era

May 28, 2025

The Face-to-Face London FP&A Board: Data Management & Analytics: Unlocking FP&A Value
The Face-to-Face London FP&A Board Mastering Data in FP&A: Smarter Analytics, Better Decisions

June 5, 2025

FP&A Trends Webinar The Evolving Role of FP&A: From Number Cruncher to Strategic Advisor
The FP&A Trends Webinar Making FP&A Teams Fit for the Future

June 11, 2025

The Face-to-Face New York FP&A Board
The Face-to-Face New York FP&A Board From Insight to Impact: FP&A Business Partnering in Action

June 17, 2025

The Face-to-Face Sydney FP&A Board
The Face-to-Face Sydney FP&A Board Modern Financial Planning and Analysis (FP&A): Latest Trends and Developments

June 26, 2025

The Face-to-Face Singapore FP&A Board: Modern Financial Planning and Analysis (FP&A): Latest Trends and Developments
The Face-to-Face Singapore FP&A Board Modern Financial Planning and Analysis (FP&A): Latest Trends and Developments

July 8, 2025

AI/ML FP&A
AI/ML FP&A
Data and Analytics
Data & Analytics
FP&A Case Studies
FP&A Case Studies
FP&A Research
FP&A Research
General
General
Integrated FP&A
Integrated FP&A
People and Culture
People and Culture
Process
Process
Technology
Technology

Please register to receive the latest FP&A news, updates and tips.

info@fpa-trends.com​

              

Foot menu

  • FP&A Insights
  • FP&A Board
  • FP&A Videos

Footer countries

  • Amsterdam
  • Austin
  • Boston
  • Brisbane
  • Brussels
  • Chicago
  • Copenhagen
  • Dubai
  • Frankfurt
  • Geneva
  • Helsinki
  • Hong Kong
  • Houston
  • Kuala Lumpur
  • London Board
  • London (Circle)
  • Melbourne
  • Miami
  • Milan
  • Munich
  • New York
  • Paris
  • Perth
  • Riyadh
  • San Francisco
  • Seattle
  • Shanghai
  • Singapore
  • Stockholm
  • Sydney
  • Tokyo
  • Toronto
  • Washington D.C.
  • Zurich

Copyright © 2025 fpa-trends.com. All rights reserved.

0