Have you ever wondered how successful businesses achieve their financial objectives? Or perhaps, what it takes to forecast financial trends that drive strategic decisions? Welcome to the captivating world of Financial Planning and Analysis (FP&A)! Imagine having a toolkit at your fingertips that could empower you to understand the financial pulse of an organization. Our ultimate guide to FP&A resources and statistics is a treasure trove of knowledge.
In this guide, we dive deep into the heart of FP&A, a field that is as intriguing as it is vital for businesses today. Whether you’re an aspiring student, a driven professional, or a finance enthusiast, this guide is designed for you. We’ve collated a wealth of resources and compelling stats that promise to transform how you perceive and understand FP&A.
So why wait? Let’s delve into the fascinating depths of FP&A together. The ultimate guide awaits you!
What Is FP&A
FP&A is a critical function within the finance department of any organization. It involves assessing the financial implications of a company’s operational decisions, setting budgets, and forecasting future financial performance. FP&A professionals play a vital role by identifying and interpreting the company’s financial trajectory, enabling strategic decision-making. Essentially, they help an organization chart its financial course, navigate economic waters, and steer toward prosperity.
But FP&A is not just about numbers – it’s about telling a story. This story paints a picture of the company’s financial health and future prospects. It involves analyzing business trends, market environments, operational performance, and myriad other factors. The story helps leaders understand where the company stands, where it is headed, and what it might take to get there. In this way, FP&A serves as the compass guiding an organization’s strategic decisions. Our guide aims to delve deeper into this fascinating field, demystifying its intricacies and highlighting its importance in today’s business world.
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Essential FP&A Statistics And Key Resources You Must Know
I have curated a collection of invaluable FP&A resources and statistics that have helped me through my 12+ year career in FP&A. I hope they will enrich your knowledge, propel your career, and drive the growth of your business.
FP&A Training Courses
Corporate Finance Institute – Corporate Finance Fundamentals
The Corporate Finance Fundamentals course by the Corporate Finance Institute (CFI) is designed to provide learners with a solid foundation in the key concepts of finance. The course is part of the Financial Modeling & Valuation Analyst (FMVA)® certification program.
FP&A Bootcamp by Christian Wattig
The FP&A Bootcamp by Christian Wattig is a comprehensive course specifically designed for those aspiring to refine their FP&A skills. Wattig, an industry expert with years of experience, delivers a dynamic and engaging program that covers a broad spectrum of FP&A topics.
From budgeting and planning to analysis and forecasting, learners are guided through real-world scenarios, case studies, and hands-on exercises. This online boot camp is a valuable resource for anyone looking to gain a practical understanding of FP&A, offering insights that are immediately actionable and applicable in an actual business environment.
Best Practices FP&A by Paul Barnhurst
Best Practices FP&A is a comprehensive course authored by Paul Barnhurst, an experienced finance professional with deep FP&A expertise. The course is meticulously designed to provide practical knowledge about FP&A best practices, focusing on real-world applications in business environments. Barnhurst shares his unique insights derived from years of hands-on experience, facilitating learners to navigate complex financial scenarios effectively.
Whether it’s about integrated financial planning, business partnering, or forecasting, this course equips learners with the necessary tools and methodologies to drive business growth and make informed decisions. A winning combination of theoretical knowledge and practical exercises, Best Practice FP&A is a must-try for those seeking to excel in the world of finance.
Here are my three favorite books on FP&A:
Financial Planning & Analysis and Performance Management
By Jack Alexander:
The book is a comprehensive guide for FP&A, bridging the gap between theoretical knowledge and practical application. It offers real-world guidance for corporate finance professionals, providing valuable insights into analyzing a company’s past performance and planning for its future.
By Karen Berman And Joe Knight
In “Financial Intelligence,” Berman and Knight demystify the world of finance. They argue that financial reporting is as much an art as it is a science, and they aim to teach readers not just the basics of finance but also how to interpret and use financial information effectively. The book emphasizes the importance of understanding financial reports, how they’re created, and how they can be used to make informed business decisions.
Create Value as a Finance Business Partner
By Bo Foged, Anders Liu-Lindberg, and Henriette Fynsk
The book aims to transform how finance professionals approach their roles within a business. It challenges the conventional view of finance as a back-office function and encourages finance professionals to become proactive business partners.
Here are three excellent online resources on this topic:
- Leading an FP&A Team – Prophix’s blog post reveals how to lead an FP&A team effectively, with special emphasis on the role of technology and talent retention.
- Building Your FP&A Dream Team – The AFP Online article outlines assembling an FP&A dream team, tackling the challenges, and providing solutions.
- How to Structure Your FP&A Team – Vareto’s blog post discusses the optimal structuring of an FP&A team for maximum efficiency and productivity.
- FP&A is Growing: According to the Association for Financial Professionals (AFP) survey, more than two-thirds of organizations plan to expand their FP&A teams in the coming years. This trend indicates FP&A’s growing importance in strategic business decisions. Source
- Resources: According to McKinsey, The typical finance organization spends about 10% more time and resources on FP&A activities than it did a decade ago. Source
- AI in FP&A: Gartner predicts that by 2024, 50% of all FP&A teams will use Artificial Intelligence (AI) for financial reporting and budgeting processes, up from 20% today. This signifies the rapid evolution of AI in finance. Source
- Adoption of Advanced Analytics: According to a Deloitte survey, about 17% of finance teams use advanced analytics for predictive and prescriptive analytics. This shows a shift towards data-driven decision-making in FP&A. Source
- Staffing: 46% of FP&A practitioners don’t believe their FP&A team is adequately staffed Source
- Workload: 65% of FP&A practitioners say their team is working at or over 100% of capacity Source
- Collaborative FP&A: A survey by AFP showed that 85% of FP&A professionals reported their role was becoming more collaborative with other parts of the business. Source
- FP&A and the Cloud: According to a study by FSN, 33% of companies have adopted cloud-based FP&A solutions, showing a significant shift towards cloud-based financial planning. Source
If you have a knack for numbers and are interested in pursuing an FP&A career, there are a few paths to consider. Here is a typical career progression:
FP&A Intern (Finance Intern)
An FP&A intern is a college student or recent grad who works with an organization’s finance department to gain experience while learning the fundamentals. For many professionals, this is where an FP&A career path starts. Responsibilities typically include assisting with preparing financial reports, models, and forecasts; supporting budgeting and forecasting activities; aiding with monthly or quarterly financial closing processes; and reviewing and analyzing historical cost data.
FP&A Junior Analyst / FP&A Analyst
Junior Analysts and Financial Analysts are entry-level roles that play a crucial role in an organization by providing senior management with the information, analysis, and forecasts required to make important business decisions. They help assess the financial implications of strategic choices and contribute to formulating the company’s overall business strategy.
FP&A Senior Analysts / FP&A Lead Analyst
Senior financial analysts and lead financial analysts are pivotal in an organization, driving multiple projects and providing critical analyses to support strategic decision-making. This role typically involves a higher level of responsibility and strategic input than an FP&A Analyst.
FP&A Manager / FP&A Senior Manager
Finance Managers and Senior Finance Managers are key in guiding an organization’s financial direction and strategic decision-making processes. This leadership role involves overseeing the FP&A team and interfacing with other department heads to ensure alignment of financial planning with organizational goals. They typically lead a group of senior analysts or financial analysts.
FP&A Director (Finance Director)
An FP&A Director is a senior role that holds a strategic leadership role within an organization. They oversee all financial planning, budgeting, and forecasting activities, providing critical financial insights to guide the company’s strategic decisions and business initiatives.
FP&A Salary Guide
Are you looking to advance your career in finance? This ultimate guide to FP&A salary is the perfect resource for anyone interested in learning more about the FP&A profession. It provides comprehensive information on salary ranges, job descriptions, educational requirements, and career path planning so you can make an informed decision when it comes to pursuing a career in this field.
- The median annual wage for financial and investment analysts was $91,580 in May 2021
- Overall employment of financial analysts is projected to grow 9 percent from 2021 to 2031, faster than the average for all occupations
- In 2021, over 370,000 FP&A positions existed across the US
- Overall employment of financial analysts is projected to grow 9 percent from 2021 to 2031, faster than the average for all occupations
- An additional 31,000 analyst positions are expected to be created from 2021 to 2031
Earning an FP&A certification can significantly elevate your profile within the finance industry. It signifies your commitment and expertise to FP&A and offers a competitive edge, enhancing career prospects and potentially leading to higher remuneration.
Now, let’s delve into the top three FP&A certifications that are widely recognized in the industry.
Certified Corporate FP&A Professional (FPAC)
The Certified Corporate FP&A Professional (FPAC) is a globally recognized certification designed for professionals seeking to advance their careers in corporate financial planning and analysis. The Association for Financial Professionals (AFP) offers this prestigious certification and is respected by employers worldwide.
Certified Financial Modeling & Valuation Analyst (FMVA)
The Certified Financial Modeling & Valuation Analyst (FMVA) is a premier professional certification program offered by the Corporate Finance Institute (CFI). It’s globally recognized and ideal for those who aspire to elevate their careers in the field of financial analysis, investment banking, or equity research. The FMVA certification focuses on practical finance applications and is respected by employers across the financial industry.
Chartered Financial Analyst (CFA)
The Chartered Financial Analyst (CFA) certification offered by the CFA Institute is a globally recognized and highly respected certification in the field of finance. This rigorous program is designed to provide a strong foundation of advanced investment analysis and real-world portfolio management skills.
- As per AFP’s 2020 Compensation Report, FPAC-certified professionals earn 16% more than their non-certified peers.
- Corporate Finance Institute’s 2021 Annual Report stated that over 15,000 professionals from more than 170 countries had enrolled in the FMVA certification program by the end of 2020.
- A LinkedIn survey conducted in 2020 revealed that the CFA charter was the most frequently mentioned certification in members’ profiles within the ‘Investment Management’ profession.
- According to the CFA Institute’s official statistics, as of August 2021, there were over 170,000 CFA charter holders worldwide.
- The Association for Financial Professionals reported that nearly 70% of FPAC-certified professionals believe that this certification has enhanced their ability to move across job roles within finance.
Financial Modeling And Forecasting
Financial modeling and forecasting are fundamental aspects of corporate finance, providing invaluable insight and direction for strategic decision-making.
Financial Models Catalog
Ever felt like you’re navigating a maze regarding managing your business finances? I’ve been there, my friend! But here’s the good news – FinModelsLab is a treasure trove of financial models that are designed to make your life easier. Think of it as your friendly neighborhood finance wizard, always ready with practical and easy-to-understand solutions.
Their catalog is like a candy store for anyone who wants to get serious about their numbers. Each model is a secret recipe for success, crafted carefully. And the best part? They’re all designed to be user-friendly, even if you’re not a finance whiz.
So, go ahead, and give FinModelsLab a try. Don’t just take my word for it. Explore their catalog, and see how they can transform your business finances. After all, isn’t it time you took control of your financial future?
- According to a report by Deloitte, 85% of companies use financial modeling and forecasting as a key tool during their annual budgeting process.
- Nearly 60% of CFOs, surveyed by Robert Half Management Resources, affirmed that forecasting, budgeting, and financial modeling skills are the most difficult to find when hiring for corporate finance positions.
- A 2020 study by the Chartered Institute of Management Accountants (CIMA) pointed out that 75% of businesses are integrating financial modeling with strategic planning, emphasizing its critical role.
- IBM’s 2018 CFO study revealed that top-performing companies are 61% more likely to use predictive analytics and forecasting, proving the effectiveness of these techniques in corporate success.
- As per the Business Literacy Institute, 90% of businesses reported improved decision-making due to the application of financial modeling and forecasting.
FP&A Software And Tools
Discover the power of Cube, a revolutionary FP&A software designed to streamline and optimize the creation of your financial and operational plans.
With Cube, you can transform complex data into actionable insights, enabling better decision-making and forecasting. This robust tool boosts efficiency by eliminating tedious manual tasks, thereby freeing up your time to focus on corporate strategy.
Microsoft Excel is the go-to tool for finance professionals. It’s an incredibly powerful program that can be used to manage data, create models, and analyze key performance indicators.
Build models effortlessly, connect them directly to your data, and share them with interactive dashboards and beautiful visuals.
Causal is an end-to-end Financial Modelling platform that helps you build, test, and deploy Financial Models quickly and reliably. With Causal’s easy-to-use interface, Financial Analysts can build models faster while maintaining accuracy.
FP&A is faster and easier than ever before. Traditional FP&A solutions are too complex and expensive for today’s growth companies, while Excel is too fragile, frustrating, and cumbersome. Jirav simplifies FP&A and delivers the insights you need faster than any solution available.
Leave the pains of Excel behind with a purpose-built solution that shifts the complexity of FP&A from the user to the technology. Learn why Jirav sets the standard for “all-in-one” FP&A.
Datarails is a financial planning and analysis platform that automates financial reporting and planning while enabling finance teams to continue benefiting from Excel’s familiar spreadsheets and financial models.
Automating these time-consuming manual processes paves the way for finance teams to spend more time analyzing data and less time gathering it. And it empowers them to answer essential strategic questions like what their organization can do to increase revenue and reduce expenses.
Finance Transformation In FP&A
A Step-By-Step Guide To Finance Transformation
Our step-by-step guide will help you maximize financial resources and create a more efficient, cost-effective system. We’ll show you how to streamline processes, reduce costs, and improve performance with our comprehensive approach to corporate finance transformation.
The Ultimate Guide To Digital Finance
Imagine a world where your financial decision-making is powered by real-time insights and predictive analytics. This is made possible through the transformative power of digital finance transformation, a revolution that’s rewriting the rules of corporate finance. Picture yourself at the helm of this transformation, leveraging technology to drive strategy, streamline operations, and lead your company to unprecedented financial success.
- According to a Gartner survey, 85% of finance teams are currently undergoing or planning a digital transformation in the next three years.
- A McKinsey survey found that 40% of activities in the finance function can be fully automated, including FP&A functions.
- Research by Accenture indicates that by 2021, 50% of FP&A teams plan to leverage advanced analytics and AI.
- The Association for Financial Professionals reports that 63% of North American companies plan to increase investment in FP&A technology.
- A report from Deloitte shows that 69% of CFOs have cited advanced analytics, including predictive modeling and scenario planning, as a top priority for their finance teams.
- A study by PwC discovered that organizations with advanced FP&A capabilities are 1.7 times more likely to report a significant profit margin.
- EY’s research found that 57% of finance leaders believe that upskilling the existing FP&A workforce is critical to successful finance transformation.
Trends In FP&A And Corporate Finance
- Artificial Intelligence and Machine Learning: Numerous companies incorporate AI and machine learning technologies into their planning processes. These advanced technologies have the ability to automate mundane tasks, deliver precise forecasts, and extract valuable insights from financial data.
- Self-Serve Reporting: Self-serve reporting platforms allow employees to create customized reports without relying on the FP&A team. It also reduces the need for manual data entry, saving time and resources.
- Increased Use of Data Analytics: Data analytics plays a larger role in corporate finance. Companies use advanced analytics to understand market trends, evaluate business performance, increase forecast accuracy, and predict future outcomes.
- Rise of Cloud-Based FP&A Solutions: More and more companies are adopting cloud-based corporate finance solutions instead of Excel. These platforms offer advantages such as reduced IT costs, increased accessibility, and improved collaboration.
- Real-Time Reporting: Thanks to technological advancements, financial reports that once required days of preparation can now be generated in real time. This enables quicker decision-making and facilitates timely responses to financial matters.
- Automation: Automating certain tasks can go a long way in reducing costs and improving efficiency. Robotic process automation (RPA) is set to be one of the most disruptive.
- Focus on Scenario Planning: In an ever more uncertain business landscape, companies are emphasizing scenario planning more. This strategic approach generates multiple forecasts based on diverse assumptions and inputs, enabling organizations to prepare for various potential outcomes effectively.
- Sustainability and ESG: Companies emphasize sustainability and environmental, social, and corporate governance (ESG). In addition, the impact of ESG reporting regulations is just starting to be felt. This requires FP&A teams to factor in ESG metrics when analyzing performance reporting.
- Growing Importance of Data Visualization: As financial data becomes increasingly complex, effective data visualization tools are becoming paramount. These tools play a crucial role in presenting financial information in a manner that is easily comprehensible to stakeholders. By simplifying the complexity, they empower stakeholders to make informed decisions confidently.
- Traceability: Automated systems for tracking data are becoming more common, allowing FP&A teams to trace all changes made to financial models back to the original sources. This helps ensure accuracy and reduce the risk of errors.
- Shift Towards Strategic Advisory: FP&A professionals are increasingly expected to act as strategic advisors to business leaders, providing valuable input on major business decisions. The ability to influence decision-makers is becoming increasingly important for FP&A professionals.
- Blockchain: The adoption of blockchain technology is on the rise in the realm of financial planning and analysis. It empowers companies to store and exchange data swiftly and securely, enabling expedited decision-making and enhanced understanding of financial trends. Financial institutions increasingly embrace blockchain to minimize expenses associated with record-keeping and payment processing.
FP&A Thought Leaders
As founder of FP&A Trends Larysa has an FP&A Board in almost all major cities worldwide, her personal FP&A knights of the round table. FP&A Trends is a powerhouse of inspiration from blogs, articles, webinars, and even a newsroom, while “FP&A CLUB”, a LinkedIn group, provides insights and quick answers to any questions you may have.
Christian posts almost daily on his LinkedIn “lists” of his tips, each concentrating on different subjects. As well as his much-loved posts on LinkedIn, many also know Christian for creating and running the top-rated “FP&A Bootcamp” where you not only learn the essentials needed to start your career but also get to hear from someone with over a decade of experience at companies including Procter & Gamble, Unilever, and Squarespace.
Paul Barnhurst has created a brand, The FP&A Guy, and he does live up to that name. He posts actionable tips and advice from his career and daily learnings about FP&A every day. This ranges from budgeting, forecasting, financial planning, financial modeling, report building, and business partnering. He is also the host of the popular podcast FP&A Today.
Boucher is a great source on a complete range of topics, including getting ready for your first job as an FP&A entrepreneur. He also hands out cool Excel tips. On top of all that, he has an online course, “Become a high-performing finance professional,” for anyone interested in improving either soft or technical skills, whether learning to analyze variances better and translating business events into financials to simplify your reporting.
Russian-born Anna Oblakova has held FP&A roles for more than 15 years, primarily in the banking sector. As Head of FP&A at Moscow-based Bank ZENIT, she transformed the function of financial planning and analysis (from nothing) to a business partnership model focused on creating value and leading a team of 10 to strategic excellence. She runs the website FPANDA club where incredible resources, including her FP&A Maturity Model – a free tool involving answering questions to rate your company’s FP&A game.
Frequently Asked Questions
How do you measure the success of an FP&A team?
The success of an FP&A team can be measured by their ability to deliver accurate financial modeling, reliable forecasting, and comprehensive reporting. Additionally, successful teams can identify potential risks and opportunities within the organization and provide relevant insights to business leaders that inform decision-making. Finally, strong FP&A teams continuously seek improvement through process automation, data analysis, and other initiatives.
Does FP&A pay well?
Yes, FP&A pays well. According to Payscale, the average base salary for a financial planning and analysis (FP&A) manager is $97,867 per year. Overall compensation can range from $76k to $140k depending on experience level and other factors. With additional certifications and experience, salaries tend to increase significantly over time. Additionally, many FP&A roles offer the potential for bonuses and other forms of compensation.
Is FP&A hard to break into?
It can be, but it’s certainly possible. While the most competitive roles may require several years of experience in finance and a CPA or MBA degree, many entry-level FP&A positions are available for those who have just completed their undergraduate degrees. Breaking into FP&A through internships, apprenticeships, and other training programs is also possible.
How competitive is FP&A?
FP&A is a very competitive field. With the rise of automation and data analytics, companies increasingly seek candidates with strong technical skills. Additionally, thinking strategically and communicating effectively are key components of successful FP&A professionals. As such, competition for top positions can be fierce.
How can I improve my FP&A skills?
There are several ways to improve your FP&A skills. Joining professional organizations such as the Association for Financial Professionals (AFP) or the Institute of Management Accountants (IMA) can provide access to various resources and networking opportunities. Taking courses or earning certification in financial planning and analysis can also benefit those looking to advance their careers. Additionally, staying up-to-date on industry trends and news can help ensure you’re at the forefront of FP&A best practices.
Have any questions? Are there other topics you would like us to cover? Leave a comment below and let us know! Also, remember to subscribe to our Newsletter to receive exclusive financial news in your inbox. Thanks for reading, and happy learning!