FP&A Teams as Strategic Decision Makers

It's been a while since posting insights, but wanted to get this out there! When does FP+A come in? At what point does FP+A play a role in scaling or helping leaders understand a business? The answer is pretty much ALWAYS. The beauty of this job is having the opportunity to speak to strategic leaders and investors in range of exciting businesses, learning approaches and philosophies on how to scale. The key takeaways I've learned from leaders in PE/VC companies recently: - How are you looking at the business? Do you trust the numbers? Get the basics right. --- This came from a leader in a very complex business ($500 mil rev, carve out, lots of acquisitions). Without ensuring the right data and accuracy are being considered, there's no hope in unlocking synergies, understanding customers, CAC and growth tactics. FP+A is the solution to this. - Optimisation and cash management. Are you being sensible? --- Lots of discussions and tactics have varied so much, particuarly in the VC arena. For the most part, we've seen a slight shift from 'growth at all costs', but does this mean that leaders are being sensible on how they're managing cash? This is always an interesting and very healthy discussion to have, particularly when founders are still involved. Strategic finance specialists are here to maintain and unlock value in the business, essentially hold the mirror up to the business. - Transformation, systems and processes --- I've been speaking to a number of CFOs who's businesses have expereinced huge growth at pace, going from (20-100, 100-400 revenue etc). How do you manage this? Particularly when it's inorganic with a range of systems and processes feeding in. A key person in maintaining sustainable growth is FP+A. A brilliant FP+A specialist will be at the center of system transformation, reporting improvements and wider operational efficiency. They will also be the key driver for any inorganic growth and integrations, which most fast-growing businesses This may be no surprise, but you should always have an FP+A specialist in a business, no matter the size or complexity. You won't be able to grow without FP+A. FP+A lifts up the hood, tells the story of the business and can unlock levers to help create value. They're also central to any wider fundraising/financing initiatives. For C-suite and naturally investors, FP+A is your best and arguably most important business partner. Whether it's competitor valuation, pricing tactics, or simply being an effective business parter for the company, galvinising the wider operations and sales teams to bring the company journey and objectives to life, FP+A is fundamental for success. I focus purely on working with top FP+A specialists in investor-backed tech businesses, drop me a message for insights or enquiries. #fpanda #valuecreation #privateequity #venturecapital #tech #finance

Advice for FP&A people: 1. Be insight-driven - act as the analytical engine of the company. FP&A professionals must continuously monitor market trends and internal performance to provide insights that drive strategic business decisions. 2. Process vs. outcome - focus on the strategic implications of financial data rather than just the process. All FP&A functions must directly contribute to business objectives and outcomes. 3. Tell a good financial story - Interpret data and craft compelling narratives that influence decision-making. Your ability to present data in a meaningful way is as important as the data itself. 4. Go outside finance - move beyond traditional FP&A boundaries and engage with marketing, sales, HR, and operations to understand their challenges and goals. You'll be shocked at how you can uncover new opportunities for resource optimization and performance enhancement. 5. Skills, skills, skills - build non-FP&A skills and apply them to FP&A tasks. Become a learning machine and enhance your capacity for innovative thinking and problem-solving. Don't go to bed without learning anything new and watch yourself become the best FP&A professional. 🦒 P.S. Before becoming the CEO at Jirav, I spent 10 years working in finance as a controller, finance director, and CFO. I helped multiple businesses grow, from early startups to established corporations and helped raise over $250 million in funding for clients across the globe.

The most common mistake FP&A people make is: → They focus on the data and reports. Yes, we all need to focus on those, but that’s scratching the surface. Instead, focus on these 3 areas: 1. Understand the business. FP&A pros must build expertise in sales, marketing, and operations, not just finance. This offers well-informed input drawn from across the organization. 2. Master the systems. Because data volumes are growing so quickly, FP&A needs skills in technology, modeling, and analytics. This helps see patterns in the data. 3. Deliver value. FP&A must drive accountability and performance across the company, providing the context for the business to make better decisions. It’s not about "reporting.” It comes down to this: 1. Don't just present reports and models. 2. Use your capabilities to provide decision-making insights. This means FP&A must: - Model different scenarios. - Identify opportunities and risks. - Influence strategy and planning. - Communicate insights effectively. - Become a trusted advisor to the business. This is how effective FP&A works.

The FP&A role is changing. Here's what's new: 1. Increased focus on strategic insights: Where FP&A roles were traditionally more focused on reporting historical financial results, there is now a much stronger emphasis on using data analytics and insights to help guide strategic business decisions. FP&A professionals are expected to provide predictive analysis and what-if scenario modeling to inform strategies around investment, M&A activity, and more. 2. Broader business partnering: Along with strategic insights, FP&A professionals spend more time partnering closely with business unit leaders across different functions. This involves understanding operations from an end-to-end perspective and communicating financial tradeoffs in a way that business stakeholders understand. The ability to act as an internal business consultant and trusted advisor has become increasingly important. 3. Advanced analytics and modeling: Leveraging software and tools to pull complex data from various systems, conduct advanced analytics, and build sophisticated models is now standard for FP&A. Professionals need skills in areas like predictive modeling, optimization, data visualization, and translating analysis into actionable recommendations. Traditional accounting knowledge alone is no longer sufficient. 4. Continuous learning mindset: The pace of change means that what used to be suitable for the FP&A role will quickly become outdated. Success requires continual learning to keep skills and knowledge relevant. Professionals must stay on top of the latest analytics techniques, technologies, and best practices to future-proof their careers and maximize value-add to their organizations. ** It's important to carefully evaluate FP&A job opportunities to make sure the role offers opportunities to impact broader strategic decisions rather than just financial reporting. FP&A professionals in strategic roles can steadily increase their compensation over their careers, providing a solid long-term career path and good work-life balance. All the best out there.

Basic FP&A versus Strategic FP&A FP&A can and should be more than covering the basics. Let’s jump in: ⤵️ 📌 Basic FP&A: ➣ Consolidate Data You download data from various systems, like Netsuite for actuals, or Salesforce for sales. Then you clean it up so everything aligns and can be consolidated in Excel. ➣ Update Spreadsheets You manage large Excel files where you get data from different sources to create graphs for your PowerPoint deck. ➣ Adjust Budgets You collect inputs from the department heads. Then you plug it into your spreadsheet to reflect the latest estimates. ➣ Compare Budgets to Actuals You update a report with last month's budgets in one column and copy / paste actuals into the next column. Then you email it to the department heads, asking for explanations. ➣ Update Standard Reports in PowerPoint Once all the Excel reports are done, you need to update the deck that gets reviewed by the senior leaders. Worst case, that means copy/pasting from Excel to PowerPoint. 📌 Strategic FP&A: ➣ Recommend new metrics You find leading indicators that tell you where the business will likely go. If the impact is significant, you improve your forecast accuracy and include the metrics in the management reporting deck. ➣ Get results sooner You identify bottlenecks in the month-end close process and experiment with different ways to remove them. Now you can present results earlier, which gives more time for deep analysis. ➣ Test a new forecasting method You experiment with driver-based planning and realize that combining several forecasting techniques improves accuracy. As a result, your forecast becomes a better tool for making decisions. ➣ Identify risks and opportunities You work closely with your business partners to find the root causes of the forecast variances. Then, you make recommendations about capitalizing on the opportunities or mitigating the risks. ➣ Implement Scenario Planning You take your driver-based forecasting to the next level by identifying best-case and worst-case scenarios. Then, you recommend what the company should do in each scenario. ➣ Identify cost savings You combine your business understanding and business partnering skills with your analytical abilities and determine which costs have low returns. Then, you suggest where to reinvest the savings. The bottom line is this: Strategic FP&A doesn’t just have a more significant impact on the business. It’s also more enjoyable. To do more strategic FP&A, you need to: #1 Automate the basics #2 Develop a broad understanding of the business #3 Become an effective Finance Business Partner So, let me ask you this: ❓Do you do basic or strategic FP&A tasks? ❓ What did you do to spend less time on basic tasks? 💎 Comment below to help others. P.S.: I share FP&A best practices every Tuesday with my audience of 17,000+ finance and accounting professionals who subscribe to my newsletter. You can get it here (free): https://lnkd.in/eGgS9hYs

🎙️ In the latest episode of FP&A Tomorrow Jon Laudie, CFO at Zerorez, Inc., shares his invaluable insights on the evolving role of FP&A and his journey from FP&A to the C-suite. 🚀 Jon emphasizes the importance of FP&A being deeply integrated into an organization's strategic planning and decision-making: "Great FP&A in my mind is a function that is deeply integrated into the strategic planning and the decision-making of any organization." ☝️ Could not agree more with this quote. He also highlights the critical role of tools and technology in enabling data-driven analysis: "You can't do it without it. We're fortunate here to have a great in-house CRM that houses a lot of our data. Operational KPIs, it's rich data that we have for our business for both the franchise side as well as kind of our franchisees." ☝️Data is the new oil. Key takeaways from the episode: ➡️ To be more strategic, FP&A professionals should build relationships outside finance and periodically analyze the business from a high level ➡️ Aligning plans requires a structured annual planning process cascading from long-term vision to quarterly plans, with frequent cross-functional check-ins ➡️ A strong accounting infrastructure and clean financial data are foundational to best-in-class FP&A ➡️ As CFO, Jon focuses on building the right team structure and improving processes and controls Jon shares valuable advice for FP&A professionals looking to be better partners and drive career growth: "Keep an open mind always, and be proactive in bringing solutions to leaders in the business before they ask for it or better yet, before they even know that there's an issue to think about." The most important technical skills for FP&A, according to Jon, are financial modeling, Excel shortcuts, and manipulating large datasets, while the top soft skill is building trust as a business partner. Don't miss this insightful episode of FP&A Tomorrow, brought to you by Abacum. Tune in now on Spotify: https://lnkd.in/ggkJC6SM