Controllers Council recently held a panel discussion on When Your Company Is Ready for FP&A: What You Need to Know, sponsored by BILL.
BILL is a leading financial operations platform for small and midsize businesses (SMBs). As a champion of SMBs, BILL automates the future of finance so businesses can thrive. BILL’s integrated platform helps businesses to be more efficiently, control payables, receivables spend, and expense management.
Our expert panelists were Ken Fick and Joe Fleischer. Ken Fick is president and CEO of FPAexperts that provides FP&A budgeting and related services with more than 20 year’s experience in corporate finance and consulting. Joe Fleischer is webinar content marketing manager for BILL with more than 16 years experience, including CFO.com and Argonne.
Following are key takeaways to this discussion. If you are interested in learning more, view the full webinar archive video here.
What is FP&A?
The simplest answer is accountants record the historical results as accurately as possible. Then, FP&A takes that information and analyzes it and explains the historical performance, which is the A in FP&A. They take that information and forecast the future period results using the insights learned for all the analysis.
We answer strategic questions. We forecast the future. We ensure timely accounting clues. We should be working hand in hand with the controller. A lot of times, we are doing a variance analysis as well.
The FP&A is really future focused and armor finance that connects the strategic goals of the company.
Importance of FP&A within the Finance Team
It comes down to the complexity of the organization and size. The larger an organization is, the need or desire to have a FP&A function is higher. Most businesses have a mindset of growth and are looking to go beyond what they have currently done historically when they add FP&A.
When should your company introduce FP&A?
There is not clear indicator when your company should introduce FP&A, but here are a few:
- Significant shifts in priorities and goals
- Rapid growth
- Frequent variance
- Chronic inefficiency due to reliance on outdated processes
FP&A can also support a company’s growth amid:
- Poor visibility
- Volatile market conditions
- Changes in leadership
- Emergence of new strategic opportunities and challenge
What are the essential skills and capabilities in FP&A?
A lot of the things done in FP&A are very rudimentary. To provide value is to take the numbers, interpret them, and put a story around them; not just reporting on them.
50 to 60 percent still only use Microsoft Excel, which is not bad, but there are other resources now with AI and other tools.
The skill set includes:
- Financial modeling
- Data analysis
- Business acumen
- Strategic thinking
- Technological expertise
What is the role of FP&A in mapping out a company’s growth in scale and maturity?
I think FP&A serves as an analytical compass for leaderships and functions as a guide in charting scalable, sustainable growth. It requires detailed modeling, planning, and strategic insight provided by FP&A.
As a company scales and matures, FP&A can support:
- Growth modeling
- Operational expansion
- Risk management
- Capital planning
- Investor relations
To view the complete webcast, download full webinar here.
ABOUT THE SPONSOR:
BILL (NYSE: BILL) is a leading financial operations platform for small and midsize businesses (SMBs). As a champion of SMBs, we are automating the future of finance so businesses can thrive. Our integrated platform helps businesses to more efficiently control payables, receivables and spend and expense management. Hundreds of thousands of businesses rely on BILL’s proprietary member network of millions to pay or get paid faster. Headquartered in San Jose, California, BILL is a trusted partner of leading U.S. financial institutions, accounting firms, and accounting software providers. For more information, visit bill.com.