Financial Planning and Analysis 

The chief financial officer (CFO) is traditionally in charge of keeping track of the business's past and present financial state and making sure that financial reporting is correct and delivered on time. The CFO is anticipated to provide strategic guidance for business decisions today. The term "financial planning and analysis" refers to this activity (FP&A). The FP&A function can take on a variety of shapes and sizes depending on the size of the business.

What is FP&A?

Financial planning and analysis is a corporate role that transforms from a number cruncher to a strategic partner by using financial data to create recommendations for the future. To enable important decision makers to make data-driven decisions, FP&A should work to give data and intelligence to them. FP&A can lower risk exposure and spot growth possibilities by having visibility into the company's financial health and activity.

What distinguishes it from the Controller?

Let's sum up the hierarchical structure of the company quickly: The CEO is the CFO's superior. Both the Controller and the director of FP&A answer to the CFO.

• The CFO oversees significant projects, expansions, reorganizations, fundraising, and other strategic activities as the organization's financial brain. The CFO must be financially savvy in order to oversee the Controller and FP&A departments.
• Accounting and financial reporting are the Controller's duties. The Controller is in charge of producing the three primary financial statements and making sure they adhere to GAAP and other legal criteria.
• FP&A is in charge of financial modeling, decision support, and strategic planning. The FP&A department uses previous data to estimate future performance, conduct sensitivity studies, and assist other groups within the firm in making better decisions

the main duties of FP&A

The company's financial liaison, or FP&A, serves as a conduit between the CEO, CFO, and the departments of sales, engineering, and operations. FP&A can facilitate the sharing of financial information to assist all pertinent staff in carrying out the strategic plan if they have a thorough understanding of the corporate strategy. Now let's discuss the specifics. The four following are the primary duties and responsibilities of FP&A:

• plan strategically: You can create a 3-year, 5-year, or 10-year strategic plan depending on the nature of your organization. This plan outlines the company's direction as well as the resource allocation strategy it will use to get there.
• forecasting financial data: FP&A can create financial models with a bull case, base case, and bear case by performing sensitivity analysis. FP&A can present this model to the various stakeholders and modify the business plan if the returns do not appear to be favorable.
• observing development": While the CFO will always be aware of the company's financial situation, FP&A should have a better comprehension of the underlying reasons for both stability and distress.
• project administration: The only difference between this and financial forecasting is that we are modeling certain projects rather than the entire business. FP&A may get involved with new initiatives to forecast cash flow and returns.

check our Financial Planning and Analysis training course, and gain more insight for an expert.