What do FP&A teams do?
What do FP&A teams do?
Why does a company need an FP&A Department?
If I had to define FP&A in one sentence it would be this
FP&A Teams act as a bridge between the business teams and the leadership.
They collect information
from various business and functional teams, Analyze that information,
and present it to senior management to help them make better business decisions.
They do that by:
✳️Providing financial insights and analysis:
📌 Gathering and analyzing data to evaluate performance
The data is used to help business teams and leaders understand how to improve financial performance, find opportunities for growth, and manage risks.
📌Ensure both business teams and leadership are making informed decisions based on a solid understanding of the organization’s financial position.
✳️ Facilitating communication and collaboration:
📌 FP&A teams often work closely with both business teams and leadership to understand their needs and priorities.
📌Promote communication and collaboration by being neutral and bringing together different perspectives.
📌For example, FP&A teams may help to make it easier to talk between business teams and leadership about budget issues. They may also help to bring different people together to work on the same project.
✳️ Ensuring Alignment
They ensure that the finance function supports the business goals and objectives by providing access to necessary financial information and support.
📌They help build trust and cooperation between the leadership, business and finance teams.
Further, it involves 3 functions and 1 mindset.
1⃣ Budgeting
They work with different departments in the company to prepare budgets
and then work on consolidating them into one overall company budget.
2⃣ Forecasting
Creating, updating, and maintaining financial models
and detailed forecasts of the company’s future operations.
This can be done in Excel or in a budgeting tool.
3⃣ Management Reporting
Preparing and analyzing internal reports
for senior management to support their
decision-making process.
And the underlying mindset of
4⃣ Finance Business Partnering
Working with businesses to help businesses identify and solve problems
The ultimate purpose is helping
the organization to make better financial decisions.
