A Day in the Life of an FP&A Pro
What exactly does an FP&A Pro Do? I recently wrote about what makes a good FP&A professional and many other considerations about being in FP&A. But there are other questions I didn’t touch on…and they’re substantial:
What exactly does an FP&A professional do?
Who do they work with?
What does their day look like?
Maybe you’re considering a career in finance or your child is contemplating their next move. Below you’ll find details on this career path. For clarity’s sake, we’ll focus on an FP&A Manager who is well into their established career at a mid-sized or large company.
What does an FP&A professional do?
Simply put, the FP&A group manages a company's financial affairs, financial strategy, pricing, cash flows, and financial partnership with non-financial professionals. I sometimes say:
“If you were to take the responsibilities of the CFO and divy them up among a group of people, the roles and responsibilities of these people would cover the bulk of the FP&A function.”
These are professionals within a company’s financial team who are responsible for providing senior management with forecasts of the upcoming cash receipts and disbursements, potential profits and losses, and other key activities. This consists of budgeting and long-range planning. These roles differ notably from roles in accounting or controllership, who are - generally speaking - responsible for keeping the company’s books, records, and assets in order but generally are not responsible for strategy and planning. Ultimately, the FP&A individuals are tasked with making forward-looking recommendations based upon data analysis and intelligence.
An average day might include:
Meetings with analysts and senior analysts who are conducting detailed assessments on a certain activity within the P&L, balance sheet or cash flow. This may include: analysis of products, customers, pricing, raw material costs, vendor management, labor spend, expense allocation, hiring needs, benefits valuation, resource allocation for marketing. The focus could be very specific or very broad. In a mid-sized organization, analysts may focus on several large projects while in large corporations, the focus may be within a sliver of one line-item within direct labor on the P&L.
Communication with a Director who is working on a key strategic initiative
Working on an upcoming 3-year strategic plan
Reviewing or updating channel or business segment forecasts
Responding to email
Drafting a presentation, and
….don’t forget lunch at some point
FP&A professionals bring a mix of technical skills, critical thinking, communication and leadership to the table daily. Often every day is different, which makes this job challenging but also interesting.
Who do they report to?
This will depend on the size of a company and its structure, but a Manager will typically report to a Director or Vice President who then reports to the Chief Financial Officer (CFO). The CFO normally has the Director of FP&A as well as a Controller reporting to them, guiding the CFO’s ability to make sound strategic decisions. It is important that an FP&A Manager and Director be able to anticipate countless possible outcomes of meetings and feedback, maintain a fluid outlook on the future, and work to meet the evolving needs of their organization. FP&A professionals aren’t just doers -- they can anticipate questions and responses and incorporate that feedback appropriately.
Who else do they work with?
Everyone! In some geographies, the roles of FP&A professionals have even been updated for title of Finance Business Partner. In a well-organized company, the FP&A team would work cohesively with each department, including sales, CEO, CFO, accounting, marketing and operations. This is where strong collaboration and communication skills come in. A Manager is tasked with building and managing analyses and forecasts that can be effectively used by each sector.
How much do they work?
The answer to this varies, of course, but an average planner might work 45-55 hours a week, with hours increasing during certain busy periods of the year. It’s not uncommon for FP&A responsibility to peak at month-close or in alignment with significant deliverables. This isn’t remarkably different than other finance and accounting professionals. FP&As are rarely expected to work weekends, although everything from hours to compensation depends on the size and culture of a company. In some companies I’ve worked with, FP&A is an intense job whereas in others it’s more laid back.
What are the challenges?
Honestly, they’re limitless. An FP&A should know that their work will be all about addressing challenges and offering solutions. Of course, every finance and accounting career has its ups and downs -- from dealing with lousy data, to managing difficult people, to knowing how to make assumptions about an unknown future.
A few of the day-to-day struggles of an FP&A team? As you can see above, communication is the force holding the entire operation together, so if that is lacking, an FP&A team’s job becomes very difficult. It’s imperative that each team ask the right questions and listen objectively in order to keep the machine, that is a growing company, running.
Analysis, planning and budgeting take a lot of time and attention to detail. A common complaint by an FP&A professional might be that they spend too much of their time and attention on small details and tasks, ultimately taking time away from larger responsibilities. I’ve worked with dozens of FP&As with this issue where they’re spending hours managing data aggregation and clean-up which leaves less time for analysis, calculations, and providing insights to decision-makers. FP&As should become quickly aware of inefficiencies, not just in the business but also in their own role, and seek to resolve them with better communication, processes, and data.
What’s the future of FP&A?
The financial management field -- which in many cases will include FP&A -- is expected to grow steadily over the next decade. The U.S. Bureau of Labor Statistics reports that Manager positions will grow at a pace of 15% and Analysts at a pace of 5% from 2019-2029. With technology and artificial intelligence (link to previous AI article) playing an expanding role in financial planning, organizations will continue to need clever, tech-savvy, and forward-thinking professionals to help lead companies into the future. If you are numbers-oriented, enjoy working as part of a team, and excited about planning for new growth, FP&A could be an interesting, challenging, and rewarding career.