You don’t have to go far to read something about a failed Merges and Acquisitions (M&A) transaction. One that comes to mind is the Sears-Kmart transaction which is cratering as we speak. It’s been called “the greatest destruction of retail value in history.” Remember the mega-merger between Kraft and Heinz? The New York Times recently called it a mega-mess. Oh, and that includes its accounting – I will talk more about that below.
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Today’s FP&A practitioners are highly trained professionals with a greater ability to see the big picture, analyse and interpret data, and build predictive models. They are also experts in harnessing the power of information technology. They are able to create detailed cost and revenue databases that unlock patterns and trends in business behaviour and to build sophisticated and responsive forecasting models. We do rolling forecasts because we know they are better and because we can.
This edition of our digest brings you articles covering the soft skills of an FP&A professional, methods to improve your P&L statements and the reality behind an FP&A department’s role in problem solving and risk management. We will also share with you an amazing case study about FP&A transformation in Nielsen.
How can FP&A work with the business to enhance enterprise value? FP&A working with the business on optimising decision making is how finance can drive the business forward. Discover how FP&A can create value by supporting critical investment decisions across the enterprise.
On 17 October 2019, I had the pleasure of facilitating, the 2nd Paris FP&A Board.
The world is becoming automated and robots are taking over. This is the narrative that has been around for a while and has been promoted as the future, but more than ever, the future is now, and we are seeing the automation of transactional and routine tasks at pace.
On 15 October 2019, I attended the 7th Stockholm FP&A Board, which was sponsored by OneStream Software and Michael Page. The topic of the evening was rolling forecast.
Whilst Parliament, the Government, the legislature and the EU have been contributing to a feverish few weeks, the UK economy has actually improved. Despite the political twists and turns, the Accountagility Index (AAX) records UK political and economic health in a score out of ten.
At a corporate level, risks can be very well mapped and controlled using e.g. the COSO framework. Defining the risks is often source driven. This means: the source of the risk is identified leading to the impact being measured by the possibility of occurrence (chance) and the size of its impact on the P&L (money). How much appetite for risk does the company have to achieve its goals?
When I first came across the term driver based planning and forecasting I was confused. As an ex-investment banker having joined a Finance team the concept of drivers when talking about a forecast or plan was simply assumptions. Why was it not called just that? Assumptions! Investment bankers have been building models with assumptions ever since the first model was built and a corporate transaction was negotiated.