Financial planning and analysis (FP&A) is vital to an organization's financial health.
More and more businesses have woken up to the importance of a strategic finance team—one made up of financial planning analysts.
Financial planning analysts aren't just "bean counters." They're the department that measures a company's financial health and provides insights for improvement.
How do they do this? Let's look at what FP&A professionals do, the importance of their role, and how to become one.
- What is financial planning and analysis (FP&A)?
- FP&A job description and career path
- Where to find FP&A jobs
- Conclusion: is an FP&A job right for you?
What is financial planning and analysis (FP&A)?
Financial planning and analysis (FP&A) is the set of financial practices encompassing planning, forecasting, budgeting, and analysis. FP&A supports a company's principal business decisions and financial condition.
While finance is responsible for record-keeping, accounting, payroll, compliance and control, risk management, and investor relations, FP&A focuses explicitly on the future financial standing of the company.
From routine activities—like financial close and consolidation, cash flow reporting, and financial reporting—to strategic initiatives—including financial insights on planning, budgeting, scenario planning, financial forecasting, and financial modeling—FP&A covers a lot of ground.
What is a financial planning analyst?
The FP&A team has one of the most mission-critical positions in any organization.
Financial planning professionals must understand both accounting and business operations. They're responsible for ensuring upper management's strategic plan is grounded in reality and reflects the current conditions that exist for the company financially.
While there are many roles within an FP&A team—FP&A Manager, FP&A Director, CFO—the analyst focuses solely on gathering company-wide data to determine the financial health and future of the organization.
FP&A professionals report directly to the CFO and the organization's CEO, sharing financial reports and models to review and use to make financial decisions. The real value of the FP&A team comes when they provide insights for executives and the broader company.
FP&A job description & career path
What is an FP&A job?
Any job that works to collect and analyze data for financial planning, forecasting, budgeting, and modeling is considered an FP&A job.
The exact job titles and even the specific roles for each position can vary from company to company.
The typical starting role on an FP&A team is the FP&A analyst. However, most employers want to see a few years of experience in accounting or another area of finance or business development before hiring an FP&A analyst.
Roles and duties of FP&A professionals
The roles and duties of FP&A professionals can vary from one organization to another, but tasks often include:
- Collecting and recording historical data
- Managing databases of financial records
- Creating financial analysis reports and models
- Collecting financial data from internal departments and external sources
- Setting and tracking KPIs and objectives
- Collaborating directly with the accounting and finance departments
- Using planning methods like predictive planning, driver-based planning, and multi-scenario planning to create financial forecasts
- Budgeting the expenses needed to execute the corporate plan
Luckily, FP&A software has made it possible for FP&A analysts to automate all the manual, error-prone work to focus on the analysis and forecasting that bring tangible results to their companies.
These solutions are the source system, the database, and the FP&A tool.
The source system is where the raw data lives. These might include:
- Accounting/ERPs (Sage Intacct, NetSuite, QuickBooks, Xero, PeopleSoft, etc.)
- Human Resources/Payroll (ADP, ChartHop, Greenhouse, Lever, Justworks, etc.)
- Billing & Operations (Chargebee, Zuora, Ordway, etc.)
- Sales & Marketing CRMs (Salesforce, HubSpot, etc.)
- BI tools (MongoDB, Power BI, Tableau, Microsoft Azure, etc.)
Then there's the database, which organizes and ensures all this data is hygienic. Sometimes the database isn't a discrete tool. Some tools have extra functionality on top of being a database.
Cube is one of these tools. Cube offers a wide range of features to aid and enhance FP&A. One of the most notable features is the ability to natively integrate with any spreadsheet like Google Sheets and Microsoft Excel.
FP&A analysts can streamline manual data, reduce errors, and drill down so they can make smarter business decisions in a fraction of the time.
FP&A job titles
- FP&A Analyst: They are responsible for gathering data about a corporation's finances, developing financial models, and creating in-depth summaries. They build extensive databases to contain and sort information about a company's income, expenses, and funding options.
- Senior FP&A Analyst: They oversee junior analysts' projects, provide analysis for the data they collect, coordinate with other departments, and present reports to managers. Senior analysts contribute to implementing corporate operations plans to meet budgeting goals and projections and conduct research and analytics for special projects like logistics optimization and acquisitions.
- FP&A Manager: Managers perform quality control tasks to ensure that all analysts produce accurate variance analysis and rolling projections. They run meetings with corporate department heads to help them determine major expenses based on analyst reports and they're responsible for combining finance reports from multiple departments to develop a vision for the company as a whole. They're also active in the hiring process and train analysts to build their financial insight and business acumen.
- FP&A Director/Vice President: It takes years of experience in financial planning and management to reach the director role. The director or vice president of FP&A develops complex strategic plans for how a corporation manages its finances and works closely with company executives and shareholders. FP&A directors present the risks and rewards of various financial planning methods and recommend how a company leadership should spend, save and invest to meet their specific goals.
- Chief Financial Officer: They're the head of a company's financial operations, including planning and analysis. While other FP&A roles consult on financial issues and advise, CFOs make the ultimate decision for major financial planning subjects. They're responsible for developing monetary policies and reporting procedures that comply with industry regulations.
Financial planning analyst education, certifications, and experience
For those looking to get into a career in FP&A, the first step is getting the proper education, certifications, and experience to help them land the job.
For education, you need to have at least a bachelor's degree in a finance-related field. Acceptable majors include:
If you are interested in going the graduate school route, consider the following degrees:
- Master's in Business Administration
- Master's in Financial Planning
- Master's in Finance
- Master's in Financial Analysis
- Master's in Accounting
As far as certifications go, several out there will give you a leg up on the competition, especially if you don't have a master's or another graduate degree.
- Certified Financial Analyst (CFA)
- Series 7
- Series 63
- Securities Industry Essentials (SIE)
- Certified Public Accountant (CPA)
To get your foot in the door for an FP&A analyst role, companies typically like to see that you have a few years of experience in a financial role first.
The salary of any FP&A position will vary depending on the size and location of the company you work for.
As you climb the ladder over the years, the salary will increase; average senior-level FP&A analysts, managers, and directors' salaries start at around $100K.
In more expensive cities like New York, London, or San Francisco, you can expect to break six figures even more quickly.
When you hit the level of CFO, you are looking at salaries starting well into the six-figure range, and some even hit seven figures. An FP&A career can be lucrative if you put in the time and effort to get there.
Where to find FP&A jobs
In the past 20 years, finance has started taking a more active role in many companies, and the COVID-19 pandemic compounded this.
The almost 15% unemployment in April 2020 was, among other things, an indication of how many companies weren't prepared for a sudden economic downturn.
This was when many companies woke up to the idea of FP&A as a strategic partner.
Christina Ross, Cube's Co-Founder and CEO, called this "the great re-planning."
Companies face an uphill battle without the ability to efficiently forecast, budget, and plan. FP&A not only helps companies make the plan, but it also helps them adjust the plan for better success.
FP&A roles are predictive, resilient, and mission-critical—so it's no wonder job positions are growing.
When you're ready to start your search, check out all of the job board websites and networks:
It can also be worthwhile to connect with a recruiter that will be able to set you up with some interviews.
Every major corporation needs a strong FP&A team and every growing company will have to build its FP&A team.
Conclusion: Is an FP&A career right for you?
FP&A careers can be hard work, but they're also very rewarding and lucrative as FP&A teams remain a central strategic force within organizations. The potential for growth in these teams will only rise.
FP&A software has also made a significant impact on the FP&A industry. FP&A software allows teams to do their work quickly, efficiently, and without error to better support the financial health of their business.
Cube is the first spreadsheet-native FP&A platform that lets you plan for the unexpected and stay ahead of changes. Our cloud-based FP&A software platform helps financial analysts plan and collaborate with the ultimate speed and confidence.
Whether you are starting out as an FP&A analyst or the VP of FP&A at your company, Cube will make your job easier.