Whether you’ve recently decided that your company is ready for financial planning and analysis or you’ve been engaging in FP&A for years, it’s important to continuously enhance this critical business function. Improving your approach to financial planning and analysis will help you adapt to shifting market conditions and maintain an edge over the competition.

Here are seven smart strategies that will help you elevate the way you approach FP&A:

1. Implement Dynamic Reporting Frequency

During initial FP&A implementation, your business undoubtedly selected a reporting frequency. While it’s important to be consistent with your reporting, FP&A is not a static function. 

Incorporating weekly, or even daily, reporting cycles for certain metrics can offer a more immediate snapshot of financial health. For instance, a daily cash flow forecast could be critical for a startup managing its burn rate, whereas a weekly accounts receivable aging report helps promptly address collection issues. 

There are no one-size-fits-all solutions here. Adjust your reporting frequency based on the challenges facing your business. 

2. Embrace Advanced Analytics and Forecasting Techniques

The heart of FP&A lies in its ability to forecast future financial trends based on historical data. Leveraging advanced analytics and predictive modeling can significantly enhance the accuracy of these forecasts. 

Machine learning and regression analysis can provide your team with better insights into future scenarios and help you navigate uncertainty with greater confidence. Prescriptive analytics are particularly promising, as they help you understand what will likely happen and how your organization should respond. 

3. Diversify the Types of Financial Reports

Traditional financial documents like income statements, balance sheets, and cash flow statements will always be indispensable. However, financial planning and analysis should also focus on operational reports that directly impact business performance. 

For example, running detailed cash flow forecasts, accounts receivable aging reports, AP reports, and payroll estimates can provide a holistic view of the company’s fiscal health. Each document offers specific insights — from identifying potential cash flow bottlenecks to managing payment schedules and labor costs. 

Remember, each type of report provides a piece of the puzzle. By combining different datasets and documents, you can identify the root cause of challenges and better understand the trajectory of the organization. More importantly, these insights allow you to proactively address any risks before they compromise the company’s financial health. 

4. Foster Cross-Departmental Collaboration

FP&A’s strategic value is maximized when it is not siloed within your department but integrated across the company. Engage with various teams to understand their financial needs and challenges so you can obtain a fuller picture of the operational landscape. 

Getting multiple teams involved facilitates more accurate budgeting, forecasting, and strategic planning. Additionally, working together on FP&As will help promote chemistry that will carry over to other projects and tasks. 

5. Develop a Strategic Mindset Among FP&A Professionals

Financial planning and analysis should move beyond crunching numbers. Adopt a strategic mindset that aligns FP&A with broader business objectives. To do this, you’ll need an understanding of competitor dynamics, internal goals, and the market the organization operates within. 

By looking past the balance sheet, you can position the accounting team as a strategic asset for the organization. Integrating finance directly into long-term planning and decision-making will have a huge impact on overall organizational resilience and agility. 

6. Leverage Technology for Real-Time Data Access

Investing in cloud-based financial planning software and enterprise resource planning (ERP) systems can provide your FP&A team with the tools necessary to access and analyze data on the go. This has become exceedingly important in the hybrid work environment, where employees are frequently operating remotely or away from their desks. 

Opening the door for real-time data access allows for more agile decision-making, enabling your business to respond swiftly to market changes or internal challenges. Promoting information accessibility will also be invaluable when preparing tax documents and addressing compliance hurdles.

7. Prioritize Continuous Learning and Skill Development 

As part of the financial planning and analysis team, you cannot afford to be stagnant. The landscape that you operate within is continually evolving, and you need to keep pace with new regulations, tech, and challenges as they emerge. 

Therefore, prioritizing continuous learning and skill development has become essential. This could involve formal training in new software, workshops on advanced analytics techniques, or seminars on global financial trends. Equipping yourself and your team with the latest knowledge and skills ensures that your FP&A workflows remain cutting-edge. 

Accelerating Your FP&A Journey 

Financial planning and analysis has become more important than ever amidst economic uncertainty and geopolitical conflicts. By adopting these seven core strategies, your business can drastically improve the efficacy and strategic impact of its FP&A operations. Combining dynamic reporting frequencies, cross-department collaboration, and modern techniques will yield the insights necessary to drive your business forward.

Additional FP&A Resources

10 Signs It’s Time to Embrace Financial Planning and Analysis

Preparing for the Unexpected: The Case for FP&A

How Finance Leaders use Automation to Modernize Their FP&A Teams