Over the past few years, the role has FP&A has changed more dramatically than most areas of in-house finance and, with the implementation of AI, this is likely to change further in the coming years.

This is SRM’s guide to the changes and what you may need to do to make the most of your FP&A function...

The rise of the Business Partner

You only have to look back 5-10 years to see the extent to which finance and, with it, FP&A have changed. Gone are the days where bigger businesses will have a core central-housed Management Accounts team and Group-level FP&A function. Both of these teams, whilst commercial in nature were very much reporting focused and, at most, preparing a yearly budget.

As businesses have begun to harness data, FP&A has been embedded into the business unit level (sales, marketing, IT etc). This business partner role (core management accountant skillset with a storytelling element) has allowed FP&A to zoom out of the business and move away from the reporting elements as this is now covered by the partners.

This has meant that FP&A has more time to shape strategy (using data) than ever before.

Powered by analytics, AI and automation

Traditionally FP&A functions were powered by large Excel sheets and basic manipulation, vLookups etc. This allowed them to efficiently review static data and prepare budgets, however, it made most other trend analysis difficult.

Tools such as Anaplan, Workday Adaptive, and Planful have allowed more dynamic long-term models to be built, meaning businesses can lean on FP&A data to create rolling forecasts as opposed to static annual budgets.

The more forward-thinking teams are also harnessing AI to look into AI-driven predictions into revenue and cost behaviours. This will ultimately affect the bottom line.

Real-time vs retrospective

Although FP&A has always been seen as the forward-thinking part of finance, most of its work was still based on data from the previous month.

By channelling integrated CRMs, ERPs and operations systems with new insight tools such as Power BI, Tableau and Looker, FP&A is now able to support the CFO with real-time data and thus improve the decision-making process.

Dashboards are one of the lower hanging fruits when modernising FP&A.

Scenario planning as standard

This has become the most obvious result of the other changes we have discussed. With more time due to the business partner model and more powerful data analysis tools, FP&A has become the fulcrum of scenario planning.

Not only has it allowed for more agile planning cycles (monthly, quarterly vs once a year), it means that specialist and long-term planning can be performed. For example, well resourced FP&A teams can, and do, run multiple complex planning scenarios that will take in; growth, recession, supply shocks and even acts of god, like pandemics etc.

This use of data, accountancy knowledge and computing power can really aid decision-making beyond anything previously.

A future-proof FP&A team

This is what we would see as a future-proofed FP&A team which would allow any business to harness technology and data to improve planning capabilities:

Group FP&A (core)

Head of FP&A

• Leads the function, owns forecasting, reporting, planning and business partnering.
• Partner to CFO and C-Suite.

FP&A Manager

• Budgeting and forecasting lead, owns planning cycles and rolling forecasts.

FP&A Analyst (multiple)

• Consolidations & reporting analyst, creates dashboards, supports board and investor reporting.

Scenario & Strategic Modelling Analyst (possibly multiple)

• Builds long-range plans and ‘what-if’ models.

Business Partner layer

Finance Business Partners (multiple)

• Supports individual business units (sales, marketing, IT etc), own planning, forecasting and analysis for their unit.
• Translate financials into business insights.

Data, Systems & Analytics FP&A (increasingly no longer a ‘nice to have’)

FP&A Systems Manager

• Admin for Anaplan, Adaptive, Pigment etc.

Finance Data Analyst/BI Analyst

• Connects FP&A with BI tools (Power BI, Tableau, Looker).

Automation & RPA Lead

Helps automate data ingestion, report generation etc.

OPTIONAL LAYERS

M&A Analyst

• Deal modelling, investment appraisal.

ESG/Impact Finance

• Tracking sustainability & social performance metrics.

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