Financial Planning Leads Efficiency & Productivity

FP&A refers to certain financial activities, which are performed by eligible professionals having relevant experience, help businesses to foresee future financial situation. It doesn't include accounting rather it starts post accounting and includes annual Budgeting, Forecasting,Variance analysis, Scenarios, Reporting of business metrics / KPIs. 

FP&A provides visibility on future trends on various key items like income, expenses, capex, cash/bank, assets and liabilities, debt and equity so finding answers to many questions and decision making becomes easy and relevant around all related matters. 

Primarily, FP&A covers three statements Income Statement, Balance Sheet and Cash Flow Statement and supportive working / statements also like revenue and expense model, headcount cost, capex planning, etc. Any item which requires deeper planning that demands separate section of working. Here are the key set of activities:

AOP or annual Budget from scratch having three statements BS, P&L and Cash Flow Statement basis of set targets for the year.

For better visibility on what will happen, we can prepare Forecasts for rest of the year / period.

To track the performance against budget or forecasts, we can prepare variance with reasons and provide recommendations.

We can build LRP generally for 2-5 years or even more to map the long term goals, financial targets and resource allocation.

We use Excel mostly and Workday Adaptive Planning but open to explore other options.

After analysis, we can suggest / discuss further options to achieve goals.