The financial planning & analysis (FP&A) department within a corporation is responsible for preparing the annual plan and long-range or five-year plan. FP&A professionals also prepare monthly, quarterly and annual management reports that compare actual results to forecasts. This department is a segment of the finance division of a company, and usually reports to the chief financial officer (CFO). The FP&A team also assists with the monthly accounting close, making certain journal entries are prepared correctly and on time.
Other People Are Reading
Education and Training
Financial analysts are expected to have, at minimum, a bachelor of science degree in finance or accounting. Having a MBA degree is highly desirable, particularly for career advancement. Some companies require that analysts have a CPA designation to ensure they understand GAAP (Generally Accepted Accounting Principles) and apply these principles to the reports they prepare.
FP&A professionals must have a thorough understanding of advanced financial analysis techniques using spreadsheet software as well as specialised financial forecasting software their company may have. They must be able to design reports that present both actual and budget data in a concise manner for use by top management in decision making. They are required to communicate well both orally and in writing, as they are asked to make presentations to upper management.
Senior management depends on information and recommendations provided by the FP&A department to make critical decisions such as those regarding multi-million dollar capital expenditures and mergers and acquisitions. If the information the analysts supply is flawed, there can be significant negative financial consequences for the company as a whole. Success in this career depends on being able to interpret data and draw conclusions, not just compile numbers.
FP&A can be a high-pressure career because during the planning cycle there are tight deadlines that must be met. The financial reports analysts prepare can involve presenting negative news to senior executives, who may challenge the accuracy of their reports. They are often given special analysis projects such as mergers and acquisitions that must be completed under extremely tight time frames and often with insufficient or limited data.
Because FP&A interfaces with all departments of the company during the planning process, this career can be a learning experience to gain an understanding of how other departments, such as marketing or purchasing, are managed. This knowledge can help financial analysts advance into a senior management role later in their careers. It can also be a stepping stone to becoming CFO of the company because FP&A is heavily involved with the day-to-day operations of the accounting department. FP&A professionals, even junior analysts, are asked to prepare reports or make presentation to top executives, so this career can help young professionals develop poise and self-confidence.
- 20 of the funniest online reviews ever
- 14 Biggest lies people tell in online dating sites
- Hilarious things Google thinks you're trying to search for