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 performance.
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 (ad hoc) 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.
In an FP&A job description, the role of a financial planning analyst is outlined as key to managing and shaping an organization's financial strategy. These professionals must have a firm grasp of both accounting principles and business operations.
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.
Let's review what skills an FP&A analyst needs and then look at a sample job description.
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 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 a few years of experience in accounting, 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 enabled 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.
In FP&A jobs, analysts can streamline manual data, reduce errors, and drill down to make smarter business decisions in a fraction of the time.
The first step for those seeking a career in FP&A is getting the proper education, certifications, and experience to help them land the job.
You need at least a bachelor's degree in a finance-related field for education. Acceptable majors include:
If you are interested in going the graduate school route, consider the following degrees:
In the context of FP&A jobs, possessing certain certifications can provide a significant competitive advantage, particularly for those who may not hold a master's or other graduate degrees.
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 annually.
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.
You can expect to break six figures even more quickly in more expensive cities like New York, London, or San Francisco.
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.
Let's look at a sample job description for a financial analyst.
As an FP&A expert, you will report to the finance director with direct reports.
Your responsibilities will include providing financial insights and projections to the accounting team. You will provide reliable data and analysis for decision-making and planning.
You will prepare accurate monthly financial reports, identify action items, and effectively frame decisions that need to be made.
Do the roles and responsibilities match my skills? Assess whether your current skills and technical expertise align with the tasks and requirements outlined in the job description.
Do I meet the qualifications? Consider if your educational background and work experience meet the role's requirements and if you're willing to obtain any necessary qualifications or training.
What are my career aspirations? Evaluate if the role aligns with your long-term career goals in FP&A and offers opportunities for growth within the company.
Can I handle the reporting structure? Consider your comfort with the described reporting hierarchy, team structure, and how the management style aligns with your preferred working environment.
What technological skills are required? Review your experience with the mentioned software and your willingness to learn new technologies if required.
FP&A stands out as a career path offering not just immediate opportunities but also long-term career sustainability and growth.
The Evergreen Nature of FP&A
FP&A's role is crucial in any business, focusing on financial stability and strategic growth. This fundamental alignment guarantees a consistent demand for FP&A professionals, making them indispensable regardless of economic shifts.
Evolving Roles with Experience
In FP&A, career growth is a continuous journey. Starting as analysts, professionals advance to senior roles with more complex tasks. Managerial positions, like FP&A Manager or Director, follow, offering chances to directly impact financial strategies and business decisions. Ultimately, experienced individuals may ascend to executive roles like CFO, overseeing their organization's comprehensive financial strategy.
Continuous Learning: A Key to Sustained Success
FP&A is constantly influenced by new regulations, shifting market conditions, and the emergence of technologies like AI and big data analytics. Keeping pace with these changes through ongoing education, obtaining professional certifications like CFA or CPA, and gaining practical experience are vital for staying relevant and advancing in an FP&A career.
The FP&A landscape has been significantly reshaped by technology, requiring professionals in FP&A jobs to be proficient in financial fundamentals and adept in using advanced analytics tools and software.
Embracing Advanced Analytics: The use of AI, machine learning, and predictive modeling has revolutionized FP&A. These tools enable quicker, more accurate analysis of large data sets, essential for nuanced financial strategy development.
Enhanced Forecasting Accuracy: Advanced tools aid FP&A professionals in producing precise forecasts by leveraging historical data and predictive analytics, improving decision-making with insights into future trends.
Streamlining Operations: Technological advancements automate routine tasks like data collection and report generation, increasing efficiency and allowing FP&A professionals to focus on strategic analysis.
Driving Strategic Insights: Quick and thorough data analysis equips FP&A teams to offer deeper insights, swiftly identifying risks and opportunities, thus enhancing strategic business planning.
Reinforcing Strategic Role: Effective use of technology solidifies FP&A professionals' role as crucial strategic advisors, making their technology-backed insights vital for informed business decisions.
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 and create annual budgets. 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 the corporate financial analyst quickly and confidently plan, generate quarterly financial reports, and analyze financial results.
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. Book a demo today.
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