Software evaluation

What is financial planning and analysis (FP&A) software?

Updated: February 20, 2024 |

Jake Ballinger

FP&A Writer, Cube Software

Jake Ballinger
Jake Ballinger

Jake Ballinger is an experienced SEO and content manager with deep expertise in FP&A and finance topics. He speaks 9 languages and lives in NYC.

FP&A Writer, Cube Software

What is financial planning and analysis (FP&A) software?

Financial Planning and Analysis Software (FP&A) helps teams manage the financial planning, budgeting, forecasting, scenario modeling, reporting, and analysis in a company…all in one platform.

Whether one person or an entire department, the role of FP&A is to help the business make better financial and strategic decisions that protect the company's financial health and optimize future financial results.

In this post, you'll learn more about what FP&A is, what FP&A software is, and preview some of the best practices and pitfalls of using  FP&A software.

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What is financial planning and analysis (FP&A)?

Financial Planning and Analysis (FP&A) is precisely that: the team that manages the financial planning, budgeting, forecasting, modeling, analysis, scenario planning, and financial reporting in a company.

Whether one person or an entire department, the role of FP&A is to help the business make better financial and strategic decisions that protect the company's financial health and optimize future financial results.  

FP&A typically reports to the Chief Financial Officer (CFO), who manages a business's finances and financial health.

The CFO has several functions within the finance team:

  1. Accounting for financial record keeping and accounting, payables and receivables, payroll, compliance and control, and risk management.
  2. Treasury for managing, protecting, and growing cash. Investor relations, for managing financial communications with investors and the board, and
  3. FP&A, for analyzing past, present, and future performance and applying context, managing the allocation of company resources (people and money), and building forward-looking financial forecasts that support the strategic goals and priorities of the business. 

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Who should be thinking about FP&A?

The CFO is ultimately responsible for—and highly dependent on—FP&A. After all, it's the FP&A team that aims to provide the CFO with a clear picture of the company’s financial past, present, and future.

This ranges from granular details down to the department, project, and expense levels, as well as a top-level view of financial performance and expectations at the strategic, company-wide level.

Business managers and departmental leaders

Business managers and departmental leaders rely on FP&A to help them make better financial decisions. This requires deep collaboration between FP&A and the business to align on corporate metrics and goals, build corporate and departmental strategies, and balance the needs of each department against those of the broader business.

FP&A must help them understand the broader financial context of the business, why certain resource constraints exist, and advise on how they can still achieve their goals.

IT leaders

IT leaders depend on FP&A to help determine the best ways to evaluate the various company and departmental technical initiatives. IT spending is frequently significant and potentially transformational, which makes close collaboration with FP&A critical to building the business case for large IT projects and ongoing IT support and maintenance.

The C-suite

The C-suite and business executives depend upon FP&A to turn financial concepts, terms, and numbers into reports, plans, and projections the business can use to guide the company.

This is true during growth, especially during economic contraction and market turmoil.

What is financial planning and analysis software (FP&A)?

FP&A thrives on deep collaboration with the business to align insights and use company-wide data when done right. FP&A needs data from across the company to do its job.

Over the past several decades, these teams have relied on spreadsheets as the foundation of their work. What began as simple financial tables designed to quickly sum rows and columns has morphed into complex, interconnected, formula-driven workbooks that invite errors and consume an inordinate amount of resources. 

Today, running FP&A on spreadsheets introduces considerable risks to a business. From manual errors to copy-and-paste mistakes to security risks, spreadsheets lack many of the integration, collaboration, and ease-of-use capabilities we all take for granted in modern software. The lack of these capabilities leaves spreadsheets lacking.

To provide a better mechanism for FP&A, software developers have been working diligently to create FP&A-specific solutions. Some are components of larger enterprise operations or financial software packages. Others are dedicated FP&A solutions that offer broad functionality and help larger businesses build unique and customized platforms.

Still, other, more modern financial planning and analysis software solutions empower FP&A to utilize the flexible spreadsheet experience while also adding new and powerful cloud-based capabilities to expand FP&A agility, speed, alignment, and more. 

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The 5 best financial planning and analysis software solutions (FP&A)

(Want a more in-depth look at different FP&A software solutions? Head over to our guide on the 10 best FP&A software tools.)

1. Cube


Cube provides a simple and intuitive experience, making it an excellent choice for companies of all sizes that want to get started fast with scalable, enterprise-grade technology at a reasonable price.

2. Workday Adaptive Planning


Workday Adaptive Planning offers strong capabilities outside of Finance and FP&A, which makes Adaptive Planning a good choice for large enterprises seeking a transformational, company-wide FP&A solution.

3. Planful

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Planful is ideal for larger companies with big FP&A teams that want to expand their scope of influence beyond finance.

4. Anaplan

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Anaplan is great for large enterprise customers with a strong IT team ready to lead an enterprise-scale transformation initiative.

5. Vena Solutions


Vena is ideal for companies that need the fixed process and planning guidance of pre-built FP&A solutions or that have the resources to uniquely customize those pre-built solutions for their own needs.

(Need help deciding which FP&A solution is the best for you? Check out our FP&A software solution checklist.) 

Real-life scenarios where FP&A drives business success

In each of these scenarios, FP&A serves as a critical partner in strategic decision-making, leveraging financial analysis, forecasting, and scenario modeling to guide organizations towards profitable and sustainable outcomes.

Retail Industry: A retail chain is considering expanding its operations by opening new stores in different regions. FP&A conducts detailed market analysis, considering factors such as demographics, consumer behavior, competition, and economic indicators. 

Based on FP&A's financial forecasts and scenario modeling, the organization decides on the most profitable locations for expansion, optimizing resource allocation and minimizing risks.

Technology Industry: A technology company is evaluating whether to invest in developing a new product or acquiring a competitor. FP&A performs cost-benefit analysis, assessing the potential return on investment (ROI), market demand, development costs, and competitive landscape. 

With insights from FP&A, the company decides to pursue the acquisition, leveraging FP&A's financial projections to negotiate favorable terms and integrate the acquired business seamlessly.

Manufacturing Industry: A manufacturing company is facing rising production costs and fluctuating raw material prices. FP&A analyzes cost structures, conducts variance analysis, and forecasts future expenses based on market trends and supplier contracts. 

Using FP&A's insights, the company implements cost-saving initiatives, negotiates new supplier agreements, and adjusts pricing strategies to maintain profitability despite external challenges.

Healthcare Industry: A healthcare organization is planning to launch a new service line to address emerging patient needs. FP&A assesses the financial feasibility of the new service line, considering factors such as reimbursement rates, operational costs, staffing requirements, and revenue projections. 

Guided by FP&A's analysis, the organization decides to proceed with the new service line, strategically investing resources to meet patient demand while maximizing revenue potential and ensuring long-term sustainability.

Financial Services Industry: A financial institution is exploring opportunities for geographic expansion and diversification of its product offerings. FP&A conducts scenario analysis, evaluating the financial implications of different expansion strategies, regulatory requirements, market saturation, and competitive dynamics. 

Informed by FP&A's recommendations, the institution develops a phased expansion plan, allocating resources strategically, and adjusting its product mix to capitalize on growth opportunities while managing risks effectively.

Common pitfalls of financial planning and analysis

1. Laborious data collection and aggregation

FP&A needs data from across the business to execute its role. This financial, operational, human resource, sales, and other data typically come from dedicated software solutions managed by each department.

Also, these solutions are rarely connected with FP&A systems or integrated into an easy-to-access central data source. That forces FP&A to work across the individual responsible teams to identify, download, gather, format, aggregate, upload, and consolidate data from many sources.

Worse yet, this manual, slow, labor-intensive exercise must be repeated each month, sometimes more often. However, FP&A software solutions can integrate and automatically collect the required financial data. 

2. Slow financial close and consolidation

Although manual data collection is usually a culprit behind slow close and consolidation cycles, many other pitfalls can derail this seemingly straightforward financial requirement. It takes time to combine the data and merge it into the proper formats for close and consolidation.

When working in spreadsheets, it also takes time to revise tables, update formulas and ranges, highlight gaps and areas of concern, and analyze and understand each new period’s financial performance and ramifications. FP&A must generate the required financial reports for external agencies, such as state and federal tax agencies, appropriate regulatory bodies, and others.

FP&A must also generate internal reports using the proper formats and templates to help the business understand the financial implications of its past period actions. This is a lot of work, which can be automated and streamlined with modern, cloud-based FP&A solutions. 

3. Inaccurate forecasts and financial projections

Accuracy is a vital imperative of every FP&A action. Regulatory, tax, auditing, and other financial reporting requirements impact a company’s bottom line; internal reporting of financial insights, forecasts, and plans impacts how the business moves forward.

Errors, omissions, and data gaps can lead FP&A, executives, and business managers to make bad decisions. This can impact a company’s financial health, from being ill-prepared for market opportunities to wasting money on initiatives that never reach their expected ROI. 

4. Short-lived financial and business plans

Each of the above pitfalls leads to financial projections, forecasts, and plans that are quickly rendered meaningless and largely ignored. For example, when it takes months to develop an annual plan, much of the data on which it is based is out-of-date before it is published.

This not only reduces the accuracy of the plan itself but also raises questions about the plan’s accuracy. It pushes the business and executives to discount or ignore the plan as they make decisions and run the business. The result is a significant amount of wasted time for the entire business, especially FP&A, as the plan was developed.

5. Weak internal controls

Finance is generally responsible for internal compliance and control, mainly where financial rules and regulations apply. FP&A depends on adherence to these controls to ensure the accuracy of their eventual reports to government and regulatory agencies.

When weak internal controls lead to sloppy tactics and frequent mistakes, it consumes more time as FP&A attempts to locate the impact of those mistakes.

Furthermore, financial and compliance audits are perilous as outside parties discover and demand corrective action to mitigate the errors and omissions from the lack of internal control over financial processes and data. 

6. Incomplete reports and metrics

Many teams and decision-makers within the business depend on FP&A output, such as financial reports, presentations, analyses, forecasts, plans, and budgets, to develop their own plans, budgets, and decisions.

When FP&A is hamstrung with a lack of speed, inaccuracies, and guesswork, these other parts of the business use that questionable data to calculate their metrics and develop their own departmental reports.

The stream of gaps and errors can flow throughout a company to create an environment where either FP&A financial insights are always in question, the business lacks the accuracy needed to make good decisions, or worse.

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Financial planning and analysis best practices (FP&A)

FP&A can be the secret weapon of any business as long as they solve the common pitfalls listed above and move towards implementing the following best practices:

Automate reports and KPI tracking

Reports are how FP&A communicates financial data, while KPIs help everyone understand financial and business progress toward goals.

Reporting, however, requires much manual effort to format, prepare, and revise every period, especially if FP&A is required to customize reports across different business and executive audiences. And KPIs often depend on FP&A first gathering and formatting data before KPIs can be calculated and published. 

Automation gives FP&A the power to update reports and KPIs instantly, usually with just one click. FP&A software then automatically generates template-driven reports and KPI dashboards, so every stakeholder sees the information exactly how they need it.

Modern FP&A software also provides interactive reports, where anyone can drill down on data to compare with prior periods, see transactional data, or develop ad hoc reports. 

Move to real-time planning and forecasting

Today’s world is moving faster than ever, and it’s riddled with uncertainty and chaos. That makes for complex planning and cash forecasting, especially when using data that’s weeks or months out of date. The legacy FP&A practice of publishing static plans and occasional forecasts quickly disappears for modern FP&A teams.

Today’s agile companies require reporting and analytics to make informed decisions to see what’s ahead and keep the company on track throughout the year. Implementing real-time or rolling plans and forecasts provides current information based on recent data. That makes better, more informed decisions because FP&A provides the business with the most accurate insights possible.

Modern financial planning and analysis software is developed to enable the proven benefits of real-time rolling forecasts. Automation helps bring the most recent data into plans, reports, budgets, and forecasts.

That eliminates most of the traditional FP&A work of chasing the business to gather data and transform it into the proper format. It also lets FP&A collaborate with the business to make better financial decisions.

Accelerate close and consolidation

Financial close and consolidation is a fundamental FP&A responsibility. But even though it’s completed monthly for most companies, few have turned it into a fast, repeatable, painless process.

Again, using financial management software to eliminate data gathering and improve data accuracy can cut much of the recurring effort required for close and consolidation. Giving FP&A and the business faster access to drill-down and roll-up reports also helps provide better insights for better decisions.

Its relative table stakes for modern FP&A software solutions provide this speed, simplicity, and accuracy to the periodic financial close and consolidation process. 

Improve collaboration with the business

FP&A provides the analysis, modeling, and financial insights necessary for the business and executives to develop and reach company-wide goals. But simply publishing and disseminating FP&A reports and dashboards to the business fails to communicate the story behind the numbers.

It’s crucial to help non-financial executives understand why a decision was made, how long an investment might take to generate an acceptable return, where different what-ifs could change potential plans, and much more. This requires close collaboration between FP&A and the broader business, from executive leaders to tactical decision-makers.

Today’s FP&A software provides easy-to-use, intuitive solutions that build proactive bridges with the business while also empowering the business to work more confidently and collaboratively with FP&A. 

Key trends reshaping FP&A software

In this section, we explore the top trends shaping the future of FP&A and how they can unlock new levels of efficiency, foresight, and impact.

Cloud-Based Solutions: The popularity of cloud-based FP&A software solutions is on the rise, driven by their flexibility, scalability, and accessibility. These platforms facilitate remote collaboration, seamless data integration, and automation, empowering FP&A teams to enhance their efficiency and effectiveness.

Integrated Planning Platforms: There is a growing demand for integrated planning platforms that consolidate financial planning, budgeting, forecasting, and reporting processes into a single, cohesive system. These platforms offer real-time visibility into financial performance and streamline collaboration across departments.

Focus on Agility and Scenario Planning: In today's dynamic business environment, FP&A teams are placing greater emphasis on agility and scenario planning. By developing multiple scenarios and assessing their potential impact on financial outcomes, organizations can better prepare for uncertainties and mitigate risks.

Enhanced Data Visualization and Reporting: FP&A professionals are leveraging advanced data visualization tools to communicate insights more effectively and engage stakeholders. Interactive dashboards, customizable reports, and storytelling techniques are increasingly used to present complex financial information in a clear and compelling manner.

Embracing Artificial Intelligence (AI) and Automation: AI and automation technologies are revolutionizing FP&A processes by automating repetitive tasks, generating insights from data, and improving decision-making. From automated data collection and analysis to predictive analytics and chatbots, AI-powered tools are transforming how FP&A functions.

Conclusion: choose the best FP&A software

FP&A has relied on spreadsheets and manual efforts for decades, even though this team offers immense business value beyond just generating financial reports.

Empowering FP&A with modern software and cloud-based solutions is the only way to bring more financial insights and better overall decisions out to the business.

Ready to witness the impact of cutting-edge FP&A software on your financial planning and analysis processes? Dive into Cube's capabilities by signing up for a demo today.

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