Vice President - Financial Planning & Analysis/Business Finance - CA

The task of forecasting a company's financials requires both an understanding of the company's historical performance as well as an understanding of the key assumptions and trends that may impact future performance. This requires a broad understanding of both accounting and business operations.

As a result, FP&A teams are in frequent contact with all areas of the enterprise including operations, sales, marketing, treasury and accounting.

FP&A's role as the eyes and ears of the organization makes it a central liaison between the corporate and operations teams.

As such, FP&A interfaces with the CEO as well as the CFO.

Specific FP&A responsibilities :

1. Budgeting and forecasting :

- FP&A teams are increasingly tasked with the development of a rolling forecast, either in parallel with the traditional budget or altogether as a replacement.

2. FP&A's primary responsibility is to connect senior management's long term - strategic plan- to reality. The strategic plan is a top-down, senior management driven document that sets high-level targets (revenue, net income, core strategic initiatives, etc.) for the firm anywhere from 2-10 years in the future.

3. FP&A's job is to develop the operating and financial plan required to achieve management's strategic plan. This process is also known as corporate performance management.

4. Historically, this meant that FP&A would develop a largely static annual budget that updates once each year. However, since static budgets get stale quickly, FP&A teams are increasingly tasked with the development of a rolling forecast, either in parallel with the traditional budget or altogether as a replacement.

5. As a key part of the forecasting process, FP&A teams conduct variance analysis to show management how the budget and/or rolling forecast compares against actual performance.

6. Decision support :

- FP&A not only reports forecasts and variances but also uses that data to advise management on decisions such as how to improve performance, minimize risk or capture new opportunities from both within the company and within the external environment.

- To this end, the FP&A team is typically charged with the creation of a monthly - CFO- or - Senior Management- book that usually provides:

- Analysis of historical financials

- Variance explanations

- An updated forecast with risks and opportunities to current plan

7. Key Performance Indicators (KPIs) :

At its best, the report provides the CFO with enough information to answer key questions from external stakeholders and may identify various levers that can be pulled to optimize performance or meet certain goals.

8. Special projects :

FP&A will inevitably be pulled in to work on special projects. Examples vary from company to company and can include:

- M&A: Identifying potential acquisition targets, buy-side support, integration and divestitures.

- Process optimization: A perennial problem for large organizations is workflow inefficiency that arises when various technical systems and tools don't - speak to each other- well. Resolving this often requires time consuming manual intervention. Because FP&A teams find themselves in the middle of these process inefficiencies, they are often the ones tasked with improving them.

- Market research: Determining the size of a given market, leaders, laggers and potential opportunities in which the organization may have a competitive advantage.

- Capital allocation: How much of and on what should the organization's capital be spent.