Written by Mark Bodger ACMA, ICit
Table of Contents
- 1 Understand how your company’s processes work
- 2 Know your audience
- 3 Respond to change with speed and agility
- 4 Be transparent
- 5 Ramp up your credibility
As a Financial Planning and Analysis (FP&A) professional you play a crucial role in supporting major business decisions. However, before your analysis and recommendations will be acted upon by senior management, you need to build a reputation for delivering trusted and accurate information. The flip side is to lose credibility.
Five Ways to Make an Impact in FP&A
1 Understand how your company’s processes work
The more you understand how your company’s processes work, the better chance you will have of making the right recommendations. For example, in manufacturing, FP&A can help boost margins by looking for ways to increase throughput while reducing production costs through procurement improvements, supply chain optimisation and other means. To gain insight and knowledge requires collaborating with non-finance managers and building a wide network of contacts across the business. This takes time to nurture, but working across traditional silos will help set you apart as your career progresses.
2 Know your audience
James Humes (former speechwriter for US Presidents) said “The Art of Communication is the Language of Leadership.” It follows that we can enhance our ability to influence better decisions by presenting our analysis in the words that senior management can understand. Try to avoid technical accounting terms and present your financial analysis in ways that demonstrate real business value; cost savings, efficiencies, revenue growth and so on. I would also recommend using an Executive Summary to convey the message succinctly. You can spend hours producing the analysis, but only have a few minutes to make an impact when presenting your results.
3 Respond to change with speed and agility
Traditionally, business decisions were made on gut feel simply because the time to produce the financial analysis took too long. The modern FP&A team has to be responsive and provide answers quickly to support senior management. With today’s abundance of technology, there is higher expectation on Finance to deliver analysis in days not weeks. The Covid-19 pandemic has added further pressure on businesses to make critical decisions, putting FP&A firmly in the spotlight to provide multiple forecasts on a weekly basis.
The challenge can be addressed if the Finance team has the right tools for the job. If you are feeling the pressure and struggling with a mountain of spreadsheets, I recommend that you seriously consider adopting a modern planning solution to allow you to save time and produce forecasts in record time. This will also mitigate the potential for errors that happen all too often when working against tight deadlines.
4 Be transparent
One of the key responsibilities of FP&A is to monitor business performance as it relates to strategy and provide senior management with early warning of potential issues that threaten corporate goals. Being able to identify trends and anomalies early in the cycle will allow time for corrective action – you don’t need to wait for the month-end accounts pack to be produced.
If you identify an issue it’s your responsibility to take ownership and to blow the whistle. The CFO may not like the news, but in my experience the last thing they want is a surprise at the Board meeting, so better to grasp the nettle early.
5 Ramp up your credibility
As an FP&A professional, you have a powerful opportunity to gain a deep understanding of how your organisation operates, its strengths and weaknesses, and how strategy can be better implemented. By designing and building advanced models you can simulate the operation and identify its value drivers. If you want to stand out as a strategic thinker, a good start is to design a scorecard that aligns to the company’s strategic goals.
Understanding the drivers that impact each of the goals, and tracking performance over time, will provide you with unparalleled insight. Armed with this information you can add considerable value to the organisation by providing professional analysis and commentary – linking operational performance to strategic objectives.
In summary, there has never been a better time to be an FP&A professional – be sure to use the current focus to make a difference and to enhance your future prospects – good luck!
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