As any business grows, the need for a solid finance planning and analysis (FP&A) team increases. A strong FP&A team helps the business measure and forecast its performance for both short and long-term goals. CEOs rely heavily on the advice and analysis provided by their FP&A team, which is why they need to have the right personnel in this role. Here are the 7 qualities required in financial planning and analysis team:
Role of communication in FP&A
The key to having a successful FP&A team is communication. All members of the FP&A team need to have a clear understanding of what the CEO wants to see in their desired results. They need to be able to understand the CEO's vision and goals for the business. They need to think critically on the numbers, including the accuracy of different assumptions, and the various analysis needed to reach their conclusions. It is also important to ensure that they are all on the same page in terms of the assumptions they are making, and their analysis is sound.
Role of creativity in FP&A
The covid pandemic has created unique challenges for FP&A teams as they try to forecast in this unpredictable environment. As a result, CEOs need to look for a team that is able to quickly adjust and revise their strategies as the environment changes. They should also look for a team that can think on their feet and be creative in their methods of forecasting and analyzing performance.
Build actionable business strategies and analyze key metrics
In addition to the ability to think flexibly, the CEO wants to see that their FP&A team can translate data into actionable business strategies. This includes the ability to measure key metrics such as monthly recurring revenue, cash flows, as well as key marketing metrics such as conversion rates, revenue from top line, and billings and bookings. It is also beneficial to have someone on the team who can specialize in data analysis, building dashboards, and providing clear visuals of the data.
Provide insights for potential investments
Another important area an FP&A team should be responsible for is providing key insights for potential investments. They need to be able to look at different investment opportunities, as well as measure how they will impact the business in terms of sales, costs, and revenue. This means that the FP&A team needs to be able to build the necessary financial models to accurately assess these investments.
In order to ensure the success of the FP&A team, the CEO needs to ensure they have access to the right resources in terms of equipment, personnel, and budget. A strong budget will allow them to invest in the right personnel and technological tools to make sure the team is able to meet their goals.
Help improve operational efficiencies
In addition to helping leaders understand the financial implications of decisions, FP&A teams can assist with other financial and business tasks. This often includes everything from developing capital budgets to identifying ways to improve operational efficiencies. The role of FP&A teams is to provide clear and comprehensive financial information so that the CEO and other leaders can make the best decisions possible.
Knowledge and passion in FP&A team
The CEO needs to look for an FP&A team that is passionate and knowledgeable about their work. They should have the ability to explain their methodology and give advice to the CEO on what strategies they should take going forward. They should also be able to teach other team members in the organization how to utilize the FP&A process effectively to reach the desired goals.
Honesty and transparency in FP&A team
The most important elements the CEO should look for are good communication, honesty and transparency, and the ability to teach and inspire other team members. With these key attributes, an FP&A team can become an invaluable asset for the organization.
Honesty and transparency are also important qualities for the FP&A team. By being honest and open about their data and analysis, the team can help the CEO make sound decisions without being misled. At the same time, team members should also be willing to take ownership of any potential shortcomings in their analysis or reporting.
Conclusion
Having a strong FP&A team is a key factor for any successful business. CEOs need to know that their team is capable of providing them with the insight and analysis they need to make good decisions and stay competitive.
With the right team of professionals and the right tools, FP&A teams can help businesses make the most of their resources and achieve their strategic goals. Ultimately, the success of a company depends on the effectiveness of its FP&A team
PS: This blog is based on a podcast by FP&A Today on “What does CEO really want from FP&A” by Paul Barnhurst and Jeanette Dorazio. For more resources on FP&A, do subscribe to its podcast and/or visit – https://www.thefpandaguy.com/
