Updated: April 28, 2023 |
By
Billy Russell earned a BA and MA in Accounting from William & Mary and worked in tax advising before joining Cube at the seed stage. He splits his time between NYC and New England.
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.
FP&A Strategist, Cube Software
Billy Russell earned a BA and MA in Accounting from William & Mary and worked in tax advising before joining Cube at the seed stage. He splits his time between NYC and New England.
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.
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.
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.
The roles and duties of FP&A professionals can vary from one organization to another, but tasks often include:
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:
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.
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:
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.
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.
However, the average starting salary for an FP&A analyst is around $50k annually, with median salaries around $80k per year.
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.
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.
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 empowers teams to drive better planning and performance without changing how they work. 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.
Sources cited:
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