Communication is a key soft skill that FP&A professionals should master. Getting it right the first time enables FP&A professionals to be more effective and efficient. Effective communication enhances their integrity and credibility.

Communication is a two-way process.  This sounds a cliché but it is true. Communication is not a monologue, even when you are using the written form as I am here. There are the sender and the receiver of the message.

Here are some key considerations for effective communication that I’d like to share 

1.    Be prepared

It is common practice to prepare before going into a major meeting or presentation. However, you should always prepare when communicating. This is not only about the physical environment or the technical aspects of the delivery. You should prepare yourself by learning about your audience, understand what is the purpose of your communication and what you want to get out of it. In an informal context, try to use a few moments to think about what you want to say and why. You will discover that you are likely to take a slightly different approach to delivering your message.

2.    When

You know when you need to present the monthly results or a forecast. 

However, when you have important information that is outside of the normal meeting schedule, have you considered the element of “when”? A communication creates more impact if this is carried out at the appropriate time. There was an occasion when I was on holiday abroad when I received a message to reduce the budget target. Two options were available to me: to wait until the budget was finalized before communicating this change or to inform the business partner in the earliest possible instance. As I was away for a week, on the morning I received the change request, I emailed a brief message to my business partner this adjustment and also a point of contact with whom she can refer to in my absence. This allowed my business partner to change the campaign activities in good time in line with the reduced budget. This also enhances a trusting relationship with the business partner. 

When you request information, you should consider the availability and the priorities of our audience. The element of “when” comes into play. You should not leave it until the last minute before making the relevant requests. This does not only create unnecessary stress and frustration. It also creates a sense of distrust which can damage business relationship.

3.    Do unto others as you would have them do unto you 

Developing empathy and respect can lead to good working relationships. Empathy helps with effective communication.  This requires you to understand your audience, to put yourself in their shoes and understand that there are cultural differences, knowledge gaps and differences in experience that lead to different worldviews and how a message is interpreted. With empathy, you are more likely to use an appropriate gesture and choice of words to get your message across. You are also less likely to offend the other party. Without empathy, what may be intended as a harmless joke in an informal conversation can be interpreted and lack of sincerity and respect. Regular communication with your business partners can help you to learn about them and through this develop empathy.

4.    Don’t multi-task

How often are you responding to an email, text message or instant message while on the phone or video conference? Multi-tasking means you are not concentrating on the message that is delivered or only hear what you want to hear. This can lead to misunderstanding. It also shows a lack of respect and disinterest in the message.

5.    Listen (and observe)

Communication is not all about you delivering a message.  A one-way communication can lead to frustration as the sender can be making assumptions that may or may not be correct about the recipient.  You should not interrupt but give time for the others to speak. I was attending a team meeting via video where the leader was constantly interrupting me when I was speaking so the others could not hear me. This led to frustration on both sides and a valuable opportunity to communicate effectively. 

Listening is not the same as hearing. You can hear every word that is said to you but not necessarily listening and therefore retaining the message.  You can demonstrate listening through body language such as leaning forward and reflecting such as “Let me see if I understand you correctly. You mean ... “

6.    Eye contact 

Appropriate eye contact promotes a sense of interest and confidence.  This is not only true when you are physically speaking to another person but also when you are meeting using video technology. I was once on a video call where a director was looking down the whole time. He did not once look up to the video camera or make eye contact with the other participants.  The participants in the meeting were not sure if he was multi-tasking or was disinterested in the meeting or was not listening at all. This does not promote trust in a business relationship. Eye contact should be natural.

7.    Take advantage of technology (but choose the right one)

Technological advancements provide us with various forms of communication: nonvideo phone, video phone, mobile phone, email, text messaging, instant messaging, video-conferencing. Each has its benefits and disadvantages. It is important to choose the right form to deliver your message. If you want an instant or quick response, you may choose phone or instant message. Be aware that instant messaging can be intrusive. Email can be more appropriate for messages that require the audience to take some time to consider a response or for multiple recipients. Video conferencing can promote a sense of closeness as a form of face to face communication.

8.    Do not overload

Try to be concise and focus on one or two key points in the message.  Also, try to avoid message fatigue by sending too many follow up emails.

One of my previous employers promotes this by limiting the length of emails to fit within a screen size, including a digital signature. This discourages lengthy emails. Employees have to think about what they really want to say and put the essential information first.

For presentations, it is best to keep the number of slides to a minimum and use them as an aide-memoire. It is best to avoid the pitfall of “death by Powerpoint”.  Sometimes less is more.  It is advisable to present one idea per slide. This means the audience is more likely to listen to your presentation rather than reading the slide.

9.    Drop the emotional baggage

Emotion can distort the true meaning of a message. Emotion creates an invisible filter lens, much like the ones applied to cameras. Emotion can also lead to miscommunication. It is, therefore, important to take the emotion out of the equation. If you are frustrated and want to respond immediately to what is meant as a constructive criticism, try to visualise a traffic stop sign and take a deep breath. This will allow you to think more clearly and respond in a professional and courteous manner. 

10.    The bag that is behind you – get feedback

You have sent your email. You have presented the results. However, do you know what your audience thinks? You know what you want to say. However, how do you know if your audience understood you? 

During face to face communication, you can see the feedback instantly by observing body language, gesture, eye contact and listening to questions and comments from the audience. However, it is not advisable to directly ask “Do you understand?” The audience is more inclined to say yes rather than admit the opposite. One can try asking for their opinion or some kind of straw poll if appropriate.

It is harder to obtain feedback when you are not carrying out face to face communication. One way to do obtain feedback is to carry out follow-up through other channels of communication. For example, for me to obtain feedback on this communication, I can check with the administrator on the number of reads and some of the comments posted by readers. In other situations, you can carry out follow up via instant messaging or a phone call. However, it is a fine balance when carrying out follow up so that not to over-communicate.
I hope these key considerations will help you with effective communication.

Simone da Silva Collins is an FP&A professional working in Polycom, an industry leader in unified collaboration solutions.

She provides business partnering to various departments of Polycom in EMEA. She was previously the Group Finance Analyst supporting the Executive Team at Intec (now part of CSG), a provider of Business Support System (BSS) software and related services, primarily for the telecommunications industry. She also worked for Telewest (now part of Virgin Media) for over 7 years providing commercial and financial support to the Interconnect team.

Simone is originally from Macau in SE Asia. She gained her Masters at Manchester Business School. She has also recently achieved FP&A accreditation.

At a recent FSN webinar “Why are some originations more insightful than others¹?”, I heard about an illustration of possibly the earliest example of what FP&A is about - forecasting, planning and providing actionable information. Most of us are familiar with the biblical story of Joseph’s interpretation of the Pharaoh’s dream. The Pharaoh dreamt of seven fat cows being swallowed by seven thin cows and seven ears plump corn swallowed by seven ears of thin and blighted corn. Joseph, the data scientist of Ancient Egypt, provided an insight and forecast to the Pharaoh: the seven fat cows and the seven ears of plump grains represented seven years of good harvest which was followed by seven years of famine. Joseph used the “data” (loosely applied in this case) based on Pharaoh’s dream to forecast over a 14-year period (seven years of good harvest plus seven years of famine). The actionable information (interpretation of the dreams) led the Pharaoh to take corrective action and put in store harvest from the good years to be used during the famine years.

However, when we talk about FP&A, the focus sometimes weights more on the planning than the analysis – weekly forecast, monthly forecast, quarterly re-forecast and annual budgeting. The provision of insight and be a strategic partner to the business can sometimes become a “by-product”. I believe that FP&A goes beyond just planning and analysis. FP&A professionals are the intelligent satnav of the business. As it was quoted by  AFP, “FP&A is evolving from an offshoot of the accounting organisation into a forward-looking, strategic function”.

However, before I embark as to why that FP&A involvement goes beyond planning, I’d like to answer a question that I often get asked when I tell people I work in FP&A – what does an FP&A do?

In its most basic form, FP&A analysts collect and consolidate data and prepare some form of management reports. In recent years the profession has become more of a business partner: they do not only churn reports or process transaction data. They help drive business forward with sound advice from a finance perspective. This distinguishes FP&A professionals from the traditional analysts. To expand this further, let’s first look at an academic definition of the word “partner”.

Oxford Dictionaries defines “partner”² as

• Either of a pair of people engaged together in the same activity
• A person or group that takes part with another or others in doing something
• Any of a number of individuals with interests and investments in a business or enterprise, profits and losses are shared

First Eureka! moment - shared the interest in a business. In general, everyone has a common interest with respect to the performance of the company in which they work. They want the company to perform well. From a financial perspective, this usually means profits, cash surplus, a share price that reflects the company’s intrinsic value (which also allows the shareholders to generate wealth when holding and/or trading in them). With this shared interest, technically each employee is a partner to the business: each contributes to the performance of the business. Some companies refrain from the term employee but refer to the term partner or associate to reflect this philosophy.

Armed with this basic understanding of business partner, we can look at what an FP&A business partner does.

FP&A gather data and apply their analytical expertise to provide insightful information to operational and organisational partners. They take a keen interest in the well being of the business from a finance perspective. They engage with stakeholder to understand their need for actionable information. They concentrate more about what is likely to happen as opposed to what has happened. FP&A use their expertise to provide sound advice to management. FP&A takes a large volume of data and use analytics to derive insightful correlations and trends as well as anomalies. This helps to generate actionable information that management can use to drive performance. It is about providing the right “ammunition” for the business to “defend itself” against the ever-changing environment. FP&A acts as the intelligent satnav. The organisation knows the path they need to take to succeed. FP&A walks this road together with the business and along the way take into account updated “road and traffic conditions” to provide advice and recommendations of corrective actions. FP&A insights tend to have two purposes: a holistic view that promotes collaboration between departments and helps management drive performance to achieve their strategic goal. They help the company to be agile.

FP&A Business Partnership Maturity Model

At their FP&A Circle meeting in London on 25^th January 2018, the International FP&A Board presented the FP&A business partner maturity model.  The 3 stages of Basic, Developing and Leading echoes the role of FP&A business partner – a trusted advisor and key influencer who acts as the sounding board through the use good analytics in challenging the business.

How does FP&A go about providing insight for the business? This model provides 4 areas of development. Apart from the essential technical knowledge of their area and gather necessary data, FP&A professionals make use of analytics as well as soft skills to gain business knowledge and provide forward-looking insights of the business. At the Leading State, FP&A move away from traditional budgeting models and go beyond budgeting. This enables FP&A to focus on developing analytics which helps management be more agile and proactive to the ever-changing environment.

A brief encounter with an FP&A

I’d also like to mention a few words on what makes a good FP&A. There are a string of qualities that FP&A business partner posses which promote them as a strategic partner.  Amrish Shah lists these qualities in his recent article “I hear you want to be an FP&A professional. Well, then you need….”³. I’d like to add to this list

• Good communicator – This is not just about the verbal signals and exchanges between the speaker and their audience but also all the non-verbal signals. It also means promoting knowledge share and not fall into the trap of becoming a rigid gatekeeper of knowledge.
• Collaborator – it is important that different parts of the organisation work together toward a common goal. It sounds cliché but this is critical in developing cohesive working practices and promotes value-added analytics and smarter decision making. You can read more on this topic from an article by Nilly Essaides “10 Ways to Enhance FP&A and Business Collaboration”⁴

So, to where does this all lead us?

FP&A does not work in the finance silo of providing backward looking analysis of what has happened. They arm themselves and their operational and departmental leaders with the “why” of the performances and develop insights on trends. FP&A uses available technology and big data to their advantage. In the leading state of the FP&A Business Partnering Maturity model, FP&A is a credible partner that the business leaders can rely on when developing a sound strategy.

Disclaimer

Any views or opinions expressed are solely those of the author and do not necessarily represent those of The Warranty Group.

Credits

¹ Why are some organisations more insightful than others?

² Oxford Dictionaries

³ I hear you want to be an FP&A professional. Well, then you need….  by Amrish Shah

⁴ 10 Ways to Enhance FP&A and Business Collaboration by Nilly Essaides

Have you thought of becoming an FP&A professional?

When I was studying for my accounting qualification, I assumed I would become a traditional accountant. I did not know then how wrong this assumption would prove to be. This article gives an insight to my path in becoming an FP&A professional and short guide on how to become one.

I graduated from university with a Bachelor degree in Accounting and Business and started working for a local audit firm. At first, it was quite interesting: looking into the figures of different companies and industries, trying to make sure all the relevant evidence was there and that it made sense. However after some time, I realised auditing wasn’t for me – it just did not challenge me enough.

After a few years of managing budgets for a local government department and acquiring an MBA  as well as an international accounting qualification (ACCA), I moved on to reporting and financial analysis at a national cable telephony company – at the dawn of the telecoms bubble in the UK. It was a good time to join the industry because there was a lot going on. I got involved not only in cost analysis but also provided assistance to other parts of the organisation including retail, wholesale and fraud. I found it exceedingly rewarding being able to support other stakeholders in minimizing risk, protecting revenue and, in some cases, growing revenue. It was then that my ‘eureka’ moment arrived: I wanted to pursue a career in which I not only provide insight but also helped promote business growth.

My next role took me closer to being a business partner. I guided my counterparts in the forecasting cycle and process, as well as reviewed the financials for the group CFO to see how we were performing against expectations. This was when one of the FP&A attributes of being inquisitive came into play. I asked my regional counterparts and decision makers what the reasons behind the variances were and what the plans were to mitigate unfavourable trends. I got to learn more about the drivers of the business. However, being inquisitive also came with its own challenges. One of my challenges was to encourage my counterparts and decision makers to share information so as to build a complete picture of what was driving the company’s financial figures. I also needed to learn to recognise if what my business partners were telling me was realistic and aligned with the direction that the financials appear to indicate. I found that through having regular reviews and discussions with my stakeholders and providing credible analysis, I gradually gained their trust. With trust, I was in a better position to encourage knowledge and information share. For me, as an FP&A professional, it is important to engage my stakeholders. This is a two-way relationship: input from my stakeholders and finance support from me.

During this role, I also got the opportunity to be involved in systems development with a view to improving the forecasting efforts. System development is an area in which FP&A is becoming more and more involved – from defining the scope and system requirements to UAT. By improving forecasting efforts, I enabled the FP&A team to free up more time to engage with their decision makers and be part of value add activities,  that is to take a more proactive role in assisting the company  to align  its actions with its desired strategic outcomes.

My current role is a trusted business partner and ‘go to’ person for all finance matters. Although I am engaged in traditional month-end reporting, I reach out to my decision makers to help align finance with business operations. Therefore, unlike the traditional finance function which looks at what happened, my role involves assisting decision makers in assessing what should happen, what financial impacts are anticipated, why the financials may indicate deviation and how to get back on track. I find that communication and transparency are essential in fulfilling my role.

So where do you begin?

One generally begins by gaining an accounting qualification through formal education and work experience followed by a professional qualification. Professional organisations such as AFP, ACCA and CIMA, to name just a few, offer certifications and qualifications with a focus on various aspects of the finance profession.

The next step is to gain experience by working with both the traditional accounting function and the business stakeholders. You may find some FP&A migrate from traditional accounting function to more business partnering as a natural and lateral move in their career. The existing rapport with accounting function and accounting knowledge enables FP&A professionals to understand the technical aspects of transactional accounting. As a result, FP&A professionals can spend more time unlocking the business intelligence data.

Apart from the academic and technical background, FP&A professionals should also be equipped with soft skills such as listening, influencing and persuasion. A service delivery mindset is essential. FP&A is not about producing fancy reports: it actually helps the business move forward.  Although FP&A skills are transferable, there is industry and organization-specific knowledge that can only be gained by FP&A proactively reaching out.

I believe that to become a successful FP&A business partner, one needs to nurture their relationships with their stakeholders. This paves the way for an FP&A professional to become their trusted adviser.

I see FP&A as the next career move for someone who has a solid accounting background and someone who actually wants to promote business growth.

Simone da Silva Collins is a FP&A professional working in Polycom, an industry leader in unified collaboration solutions.

She provides business partnering to various departments of Polycom in EMEA. She was previously the Group Finance Analyst supporting the Executive Team at Intec (now part of CSG), a provider of Business Support System (BSS) software and related services, primarily for the telecommunications industry. She also worked for Telewest (now part of Virgin Media) for over 7 years providing commercial and financial support to the Interconnect team.

Simone is originally from Macau in SE Asia. She gained her Masters at Manchester Business School. She has also recently achieved FP&A accreditation.

Excel is still a popular tool when it comes to preparing financials or analysis. However, we often hear financial professionals complaining about how inadequate Excel can be. So why have we not “rid” ourselves of this seemingly “inadequate” tool. This article explores the pros and cons of using spreadsheets. There are a few best practice tips that may be helpful to the vast majority of spreadsheet users.
 
First, Excel has been used synonymously with the term spreadsheet but Excel is a proprietary version of spreadsheets. There is Lotus for those who remember the days of DOS. Lotus was officially retired in 2013. For web apps, there are Google sheets, Yahoo sheets and Zoho sheets to name a few. It is spreadsheets that we really can't rid ourselves of.

What is wrong with spreadsheets?

The first drawback is that spreadsheets are susceptible to human error. Simple data input error can topple the best build model and lead to catastrophic consequences. Spreadsheets are also susceptible to fraudulent manipulations where there is a lack of suitable controls.

Complex models can be difficult to troubleshoot. Linked spreadsheets can be spread across multiple folders or sites (from domestic sites to geographically diverse sites). There is also the risk of links not updating. Spreadsheet model tends to have a personal touch that does not lend itself to be agile nor for collaborative work.

Spreadsheets are not geared for scalability as the volume of data grows with the organisation. They can also be difficult and time-consuming when it comes to data / financial consolidation. Processing speed tends to be inversely proportional to the volume and complexity of models.

Last but not least, spreadsheets alone are not geared for developing analytics.

So why so many of us are still using spreadsheets?

When it comes to simple data entry or quick ad hoc work, spreadsheets are still the favourite. It is simple to use. More importantly, in this digital age, everyone is taught to use spreadsheets during their formal education. There are free online tips and videos on social media about the effective use of spreadsheets, which further promotes its popularity.

Spreadsheets are essentially cheap. Proprietary spreadsheet application such as Excel is part of the Microsoft office suite. Microsoft Excel 2016 introduced Power tools. Power tools enable spreadsheet users to handle a larger volume of data and enhance user experience in creating data visualisation. This appeal to spreadsheet users who have not yet ventured to alternative data visualization tools such as Tableau and Microsoft Power BI. These tools tend to have preference in getting data from the table layout - data stored in rows and columns, which is also the way spreadsheet data is arranged. This is distinguished from data in a Table format which has certain cell range features.

Where do we go from here?

If your company is still using spreadsheets for reporting, modelling and/or planning, here are a few useful best practices

• Keep it simple. Avoid linking worksheets or workbooks externally. If this is really necessary, ensure changes are communicated. Do not create daisy chain. Refer to the source for input as opposed to a cell that references the input.
• Document the objective, processes and procedures as well as change log in the model. Separate summaries, instructions, inputs, drivers, outputs, scenarios, calculations, assumptions, error checks, change log, source data in different tabs.
• Encrypt the model to prevent unauthorized access.
• Standardised naming conventions, model layout and structure. Create a consistent formula for a range through the use of absolute/mixed references. 
• Press Enter after completing entry to a cell instead of clicking away to another cell – this avoids inadvertently incorrect referencing in a formula.
• Mark the final version as Final which prevents further changes and makes the file as read-only.

Now that we have explored the drawbacks of using spreadsheets and why we are still using them, do you think we will eventually move away from spreadsheets in finance?

Disclaimer
Any views or opinions expressed are solely those of the author and do not necessarily represent those of The Warranty Group. The Warranty Group is part of Assurant.

The article was first published in Unit 4 Prevero Blog

This article explores the attributes of Big Data and considers whether having more data is always good. First, let's get back to the basics. What is Big Data? Put simply, big data refers to a vast variety of data with which an organisation can engage. The aim is to use big data to improve business performance. This is applicable to profit and non-profit organizations, financial and operational measures.
 
Big Data had various attributes, categorised into volume, veracity, variety, velocity and value. Volume refers to the quantity of data. Veracity is the quality of the data in terms of accuracy. Variety refers to the diversity of data. Velocity denotes how fast the data can be processed and be available for use.  Value is what insight the data can provide.
 
We are inclined to agree that the more data we have, the more we are able to generate better insights. However, can we have too much data? I venture to say an organisation can be overwhelmed by data if data is not properly structured or does not have a purpose. The key here is the analytical ability to derive insights from the vast quantity of quality data in a timely fashion. Let us look at each point.
 
Quality data

Accuracy is key to driving good insight of the business. In a trade-off amongst the various characteristics of data, accuracy wins hands down. Data should never be pre-assumed to be accurate on face value. Some form of validation should take place to provide confidence. Accountants will be familiar with the term “reasonableness” test. Does the data appear reasonable?

In addition to accuracy, we also need to consider the suitability of the data. To determine the suitability of data, first we need to answer the question – what are we trying to achieve here? Or what is our hypothesis? Data can only be considered as good quality if it helps with answering an intended question, proving or disproving a hypothesis.
 
Analytical ability

Data alone cannot aid business improvements. An organisation needs to be able to draw insights from the data collected. This normally falls into the remit of the FP&A team. In some organisations, there are specific teams to investigate specific characteristics of the data. Data architects help organisations manage data in a structured manner. Data analysts extract knowledge and insight from the data. A word of caution: one should not fall into the trap of drawing conclusions or correlations from data just because correlations/conclusions are expected. The analysis should be set out to prove or disprove the hypothesis. The ability to do so comes with experience and knowledge share with other parts of the organisation.
 
Timely fashion

Data quality deteriorates with time. Big Data is generally used to drive future-looking projections. An agile organisation strives to respond to the ever-changing environment with the data it can access. Insights drawn from outdated material can lead to non-actionable conclusions. Not all data needs to be real-time. True real-time refers to continuous stream of data. This is useful for say traffic management. Data can also be “right time” i.e. data available at the time when it’s needed to allow an organisation to take corrective action. For example, real-time Christmas toy sales data does not necessarily help toy store sales plan because the store has already stocked up for the season. However, this data made available at the planning time together (usually in the early part of the calendar year) with other drivers can improve the quality of the next Christmas sales projection and stock order.

Finally, as Francois Badenhorst pointed out in his recent blog on Accountingweb – it’s not data for data’s sake. Data is the most valuable asset. FP&A should express an interest and be involved in defining data capture requirement and structure. This enables FP&A to better equip an organisation in managing its performance.

Disclaimer

Any views or opinions expressed are solely those of the author and do not necessarily represent those of The Warranty Group. The Warranty Group is part of Assurant.

The article was first published in Unit 4 Prevero Blog