Financial planning entails effectively defining and timing future resource deployments. Scenario planning is a technique used in FP&A to help guide companies through considerable uncertainty, contemplating various paths of possibilities. Despite our best attempts, our forecasts will have inherent errors; actual results deviating from the figures we had anticipated hitting.
We cannot know, with certainty, how the future will unfold for our companies. We are not fortune-tellers. Forecasts will almost always be wrong because they assumptions we make about the future will be incorrect and frequently change.
Non-financial managers bring much-needed operations focus into workplaces. Yet, because these managers typically lack strong financial acumen, it’s sometimes difficult for them to make strong business cases when they haven’t clearly identified the financial benefits.
Ten to fifteen years ago, I was a fraud examiner and forensic accountant. I was responsible for examining financial mischief. This included cash flow mismanagement, inventory manipulation, check kiting, and outright theft.
Business intelligence software is easy-to-use, affordable, and offers an alternative to running filtered pivot tables and pivot charts in Excel. The incorporation of data visualization platforms, such as Tableau, Qlik, and Power BI, are revolutionizing the ways in which financial information is presented.
Financial planning & analysis, or more commonly referred to as FP&A, is a business discipline focused on financial management and strategic alignment. To put it more simply, if a CFO’s position were broken down into its many parts and those parts were translated into separate job descriptions, most of those jobs would be in FP&A.
Among all the changes taking place within FP&A today, digital transformation is one of the most significant. Never in the history of business has information been so accessible, so quickly, as it is today.
A core aspect of financial planning & analysis (FP&A) is forecasting and budgeting. To plan effectively and envision the future, businesses must contemplate company-specific, competitive, and macro considerations.
The pressure of globalization and agile decision-making requires companies constantly advance their business models. This may translate into a focus on top-line growth and process improvement. For certain, companies must also have excellent visibility into their costs.