What Does Financial Planning and Analysis Entail?

Many FP&A teams are focused on assessing the annual budget, forecasting, and conducting monthly variance analysis. That’s the nuts and bolts behind the typical financial planning and analysis function, but there can be so much more to it, as a  strategically-minded FP&A team brings concrete, strategic value to senior-level decision-makers and forges strong connections with key business leaders and team leads.

These connections, along with fresh perspective, are necessary for building trust as the FP&A team  draws out information from the various organizations and, as partners, work together to decipher what’s working, what’s not, what the potential fixes could be—and bringing all of those findings to the forefront. With lots of competing priorities between the product management team, engineering team, and sales, for instance, an FP&A expert acts as a neutral party to bring all the viewpoints and ideas together and parse through the information. After all, every business decision comes with tradeoffs and potential impacts on other projects in the works—the financial planning and analysis expert brings these to light.

Inquisitive and forward-looking, FP&A experts ask many “why?” questions, to help the business think through the answers, and generate new ideas and possible moves forward. We sometimes look back at historical data to inform our understanding, but we’re leaning forward most of the time, as we uncover strategic insights for developing your company’s future.

How is the Business Really Doing?

FP&A experts examine and evaluate the company’s financial records to not only understand how the company has performed, but to help it make insightful, data-driven decisions for future growth. They can help devise key performance indicators, for example, and evaluate whether these are met. They can help the CFO, CEO, and the board of directors understand where stumbling blocks to growth lie, and undertake FP&A modeling to explore potential growth paths.

Sure, FP&A experts can block and tackle with standard fare like the budgets, reforecasts, or helping to finally check off that goal of moving to rolling forecasts. But to make the leap toward bringing strategic value to the organization, the FP&A function takes on sensitivity analysis and modeling/what-if analysis.  They can tease out and then test assumptions—for example, they will explore whether the company is better off developing internally or using M&A activity to bring in a particular product or resource. They can model an infrastructure modernization program to see what’s needed today and over varying lengths of time.

Strategic Financial Planning: 5 Major Ways FP&A Provides Value

Unlock the strategic value within your FP&A function by understanding how this type of expertise and knowledge can be better mined and put to use for making more informed decisions. Here are a few examples.

Asking the tough questions. When you are running a business or overseeing the finances of an organization, there’s a constant question you need to answer: Are you making the right decision?

If it turns out you’re not—if that significant internal project you just okayed turns out to be a failure—then you’ll find out too late that you gave up funds and resources that would have been much better allocated toward something more worthwhile. With the right mix of skills in the FP&A team, you can have confidence in the decisions you’re about to make—or know that it’s time for a change in direction.

Speaking the language of many aspects of the business. A strong financial planning and analysis expert is multilingual—they speak accounting, operations and sales, and thrive on getting all the cylinders pumping in the same direction. I can’t tell you how many meetings I’ve witnessed where everyone nodded in agreement and then later in the hallway, or via Slack or Microsoft Teams, I am asked to translate what was said. As a finance planning and analysis expert, this is second nature to me—but it can be a concern for companies that do not have a robust FP&A function and may be dealing with unnecessary misunderstandings at times.

Keeping  strategic projects rolling. M&A deals are understandably reviewed at length before the go/no go decision, but what about all the projects and investments your company should also be considering—and acting on? You need data and analysis for the benefits and trade-offs of internal investments with an unbiased framework.

Should you bring on 20 new sales reps as your company grows? What does your company need as it launches its next product? What competitive pressures will cause growth obstacles? Is a streamlining of the business in order? FP&A experts provide real-time analysis to help direct the company’s next move.

Conducting a pre-mortem. After a project has wrapped up, a post-mortem, or review of what went well and what didn’t, is a typical step. These assessments often reveal what procedures and practices should be carried over to other projects—and what should not be repeated again. Potentially even more effective and powerful is a pre-mortem, when the FP&A team instigates a review before the project is complete, to assess “What could go wrong?” This proactive review can reveal where to install some guardrails, where to shore up the information, and helps make sure the deliverable is on track while anticipating challenges.

Adopting—and adapting to—new planning software. Moving beyond Excel and into planning tools increases scalability, decreases iteration time, allows for more nimble reporting (and slicing and dicing differently on the fly), to get at a more robust, single source of truth. It’s not easy to make the move, however: Implementing new software can take a toll on an in-house FP&A team, as it can detract attention away from the core job at hand as everyone gets accustomed to the changes. Avoid burnout and ease the effort by turning to FP&A experts who have experience using a variety of tools in companies of various industries, size and complexity.

Creating a Stronger, More Strategic FP&A Function

The world is very fluid now, and we can all use any advantages we can gain. Get a leg up by uncovering the hidden power of FP&A consultants. We help companies overwhelmed by current initiatives who could use our expertise, and we can help elevate an existing FP&A team by creating a framework that will help them stretch and grow—and become the kind of team that provides reliable, insightful information all the time. Reach out to RoseRyan today to find out how we can help create, enhance, train, or be your FP&A team.


As a senior consultant at RoseRyan, Suzanne Yost excels at financial planning and analysis, revenue recognition, general operational accounting, and other vital finance and accounting functions. She previously served as financial planning revenue and revenue accounting director at Genomic Health, and she also worked at Teros and Caliper Life Sciences.