Financial Planning &
Analysis (FP&A)

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FP&A as a Part of Corporate Controlling

FP&A manages all operational and strategic tasks in the areas of business planning, management and control for an organization. It supports financial management and is a key element of the division of the CFO. New technology is rapidly changing financial planning and analysis. Digitalization not only has an influence on data quality and various processes – it also changes the entire finance department and thus the role of the controller and the CFO.

Where does Financial Planning & Analysis start?

FP&A starts with financial planning, which is the foundation of economic success for any company. This involves drawing up detailed plans based on specific financial objectives. This enables the controller to capture, analyze and plan all the important financial aspects of the company.

Financial planning also includes an analysis of the actual situation. The controller generally includes past events in the analysis. Once the actual situation has been analyzed, the controller compares it with the target situation, which is based on specific financial objectives. This results in a financial forecast.

On the basis of this analysis, FP&A builds up the financial planning of future revenues and expenditures. All objectives and results that can be derived from the financial planning process are then recorded in a financial concept.

How can finance solve current challenges?

The impact of digital transformation is visible in business models and markets. This is noticeable in every organization of nearly every size and type. There is a need to identify and drive forward new initiatives that support changing strategic goals due to digital transformation.

In companies that do not yet use an enterprise performance management solution, financial processes are still performed manually. The finance team often uses Excel spreadsheets for all budgeting, forecasting, modeling and reporting activities. Subsequently, organizational collaboration struggles.

As a result, finance spends a lot of time creating budgets and forecasts so that they are out of date by the time the plans are completed. Due to this obstacle, the finance department can provide the basics, but then has limited time for any value-added activities to support decision makers in making better-informed decisions faster to create better strategy.

The Benefits of Enterprise Performance Management in FP&A

Enterprise Performance Management (EPM) or Corporate Performance Management (CPM) is one of the central management tasks in a company. It summarizes the systematic, strategy-oriented management of corporate performance. This includes all processes and methods required to manage a company: all financial strategy processes such as planning, budgeting, forecasting and reporting and analysis. Consequently, EPM represents a particular benefit for FP&A, as it provides automation for multiple processes.

Modernization of planning, budgeting and forecasting

Numerous budgeting and planning processes can be simplified company-wide by using a digital EPM solution. Using a unified digital solution enables today’s controllers to become tomorrow’s decision makers. EPM solutions give controllers insight into accurate and more up-to-date data.

Tight integration with Microsoft Excel enables users from other areas to create their own reports and act independently of the finance department when collecting data and information.

Advantages for finance:

  • Controllers play a greater role in the integrated planning process

  • Less support and training required for the finance team
  • Controllers can create more accurate forecasts
  • Uncertainty is reduced across the entire process

Digital EPM solutions generate immediate benefits because they:

  • Automate data entry
  • Minimize manual intervention
  • Reduce the reporting burden

Save time and create added value:

  • The analysis of deviations
  • The production of rolling forecasts
  • Cash flow modelling
  • The knowledge gain that affects financial performance

8 of the Top Use Cases for FP&A Specialists:

Changes in the finance department: From report creator to business partner

To adapt to the significant changes in finance, the changing role of the finance department comes into center stage where innovation, agility and growth are now even more important. This also applies to employees, processes and technologies. The classic finance model must therefore grow beyond the traditional functions of accounting, controlling and reporting. Finance’s goal is to maximize its potential by providing new insights and better forecasts. This enables better decision-making in all departments across the organization.

What is Financial Planning & Analysis (FP&A)?

Financial Planning & Analysis is the intersection between finance and corporate management. It comprises all management measures for coordination within the finance division, and the intersection between finance and the service division.

One of the most important objectives of FP&A is to safeguard liquidity, i.e. the company’s ability to meet its payment obligations at all times. Financial planning, budgeting and forecasting are the primary instruments used to ensure liquidity. FP&A also includes financial consolidation. It enables precise group reports, fast financial statements and comprehensive financial control.

In addition to maintaining liquidity, maximizing profits or increasing shareholder value is another goal. Consequently, FP&A coordinates the company’s financial resources in such a way that investments in performance will lead to an increase in value.