2018
How the FP&A Team Can Play a More Integral Role in Your Organization
Data entry services provide accurate data to the FP&A team to make informed decisions. Here is how the FP&A Team can play a more integral role.
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Accurate data is vital for organizations to make informed decisions. Typically, businesses utilize data entry services to obtain the necessary data. Quality data is delivered to FP&A professionals to prepare better for potential opportunities and risks. FP&A (Financial Planning and Analysis) is a team that plays a crucial role in companies by performing budgeting, forecasting and analysis that supports major corporate decisions. FP&A professionals utilize both qualitative and quantitative analysis of all operational aspects of a company to evaluate the company’s progress, achieve present goals and plan future objectives. FP&A professionals analyze data on Profit and Loss Statement and Balance Sheets. They help in linking revenue and cost drivers to actual financial performance and add strategic value to the business. They identify the inefficiencies that affect the financial performance of the business. A few years ago, access to accurate data was difficult for FP&A professionals and it resulted in poor business data analysis. But today, companies are generating huge volumes of data through data warehouses, e-commerce, and even through direct interaction with customers. With rising amount of data, the role of FP&A in an organization is moving beyond financial metrics. They should have the skills and acumen to help define overall business growth. How can these professionals make optimum use of the large amount of data available? The foremost step to take is to identify the data that is most important and relevant, for e.g. KPIs (Key Performance Indicators) or the metrics they would include on their balanced scorecard. There should be efficient systems to access and analyze the data. Once the analysis is done and the required information gathered, the findings must be clearly presented to the audience. Another important task the FP&A people should do is track the data and provide feedback to the business regarding performance. They may have to review and modify the initial metrics identified to ensure that the business can focus on what really drives performance. Following are some of the steps FP&A personnel can take to provide feedback about the business performance and improve growth.
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Set up a good team: Earlier, FP&A professionals focused only on developing their staff in financial analysis and business partnering skills. The team typically comprised accounting professionals with good accounting skills. But today, FP&A professionals must broaden their skills in data analytics and visualization also. Apart from professionals with good accounting skills, managers should consider candidates with programming, data analysis and strong statistical skills to develop the business.
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Improve data analytics skills of the team: A mix of data analysts and financial analysts is ideal in the long run. Training your existing team members is important to ensure success. FP&A team are usually organized by functions, by product or by geographic region. So you can arrange for specialization in different data tools. This is will help you to improve your team’s analytical capabilities as well as serve additional development opportunities for retention and career development.
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Have a scorecard mindset: The FP&A team must be capable of understanding the financial repercussions of actions taken by business leaders. In addition, they must also understand what the important business drivers are. Financial planning and analysis personnel can contribute considerably by understanding and participating in discussions that involve non-financial KPIs and expressing how those indicators can affect the business’ bottom line.
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Lead discussions though data visualization: FP&A professionals should have the ability to link up and look at all parts of the business holistically. They should have the potential to develop skills in presenting that holistic view to clients in a concise and appealing way. Data visualization is the ability to strip down information into simple and meaningful insights.
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Consider regular reviews to improve performance: The strategic direction a business should take must be consistent, but businesses may have to adjust to the changing dynamics of the business environment. So it is necessary to conduct regular reviews and identify the areas that need to be improved.
To accomplish the above-mentioned steps, it would help to organize a task force to decide what to track and how to measure performance. The support from senior management is important because this requires time and resources. The team should have adequate training in order to develop the skills required. Ideally, the entire FP&A team should develop
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a strategic mindset. Apart from finance, the team should consider themselves as part of the business team and understand key business drivers. Artificial Intelligence (AI) to Assist FP&A Artificial Intelligence helps to capture, manage and analyze large amounts of data to produce valuable insights accurately. AI will minimize the number of people needed for FP&A but professional surveillance is important for better planning and management, as well as for the decision making process. Everything starts with data. The quality of data is important for AI as well as FP&A. To ensure maximum accuracy of data, businesses can utilize data cleansing services. The quality of data entering the system must be superior for better reporting and forecasting. FP&A professionals can play a strategic and integral role in their business’ growth. FP&A professionals must rethink their role in the business organization and develop the skills and insight to help identify the overall business direction and new growth opportunities.
www.managedoutsource.com
(800) 670 2809