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Assess the current role of the strategic financial planning and analysis (SFP&A) as a key function is to provide accurate, timely financial analysis and advice to the organization's leaders. What can value-added contributions be obtained from aligning the organization's overall strategy to financial planning? Financial Planning and Analysis (FP&A) Financial planning and analysis (FP&A) professionals own the financial planning, budgeting and forecasting process at a company to inform major decisions made by the executive team and board of directors. These employees collect, prepare and analyze financial data from across the organization to create reports that provide data-driven answers to business questions. The FP&A function is becoming increasingly forward-looking. It’s using best practices to focus not only on what happened or what’s happening but on why it’s happening and what is likely to happen in the future. An FP&A director or analyst should be a business partner for the entire organization, working closely with various business units, and a strategic advisor to the CFO or controller. These professionals help leaders of the finance department maintain and mitigate additional costs by identifying opportunities for efficiency, savings and investment. The role of FP&A has evolved in recent years. In the past, FP&A analysts focused on recording and reporting financial results and leveraging historical financial data to extrapolate future sales and earnings. But the flood of data available today and the technology that helps analysts use it has empowered FP&A to move from more reactive work to providing insightful predictions and analytics that directly influence the business’s direction. FP&A is distinct from accounting in that it focuses on forward-looking data and attempts to anticipate future outcomes, while accounting reviews past and historical information to determine a company’s current financial state. FP&A Skills An FP&A analyst or director needs to excel at math and have an appetite for crunching numbers. It’s therefore no surprise that many people in this role are former accountants. But professionals in this field also need to be comfortable diving into complex and varied data sets from sales, marketing, human resources and operations. Spreadsheets are an essential tool in analyzing that data, so FP&A employees need to be skilled with Microsoft Excel or a similar tool. They need to know the formulas and processes that will allow them to aggregate and manipulate raw data to produce key reports. They should know the basics of ERP systems, understanding how this software can automate reporting and assist with more complex reporting and analysis.  Role of Strategic Financial Planning and Analysis Essay Paper FP&A Responsibilities

• P&L: The FP&A team is responsible for putting together profit and loss (P&L) statements, board reports and management reports such as variance reports, which track budget vs. actual spend by department, and statements of cash flow. Finalizing these statements requires collecting data from different departments (thus the business partnering skills) and then verifying and consolidating that information. The FP&A team uses that to calculate key financial indicators that will appear in these statements—like debt-to-equity ratio and current ratio.
• Profit Margins: FP&A professionals often dig into financial statements to understand which product lines or services have the highest profit margin or contribute the most to net profit. Similarly, they may break down the cost and revenue or profit generated by each department within the company. Another common duty of FP&A team members is assessing a business’s investments with its working capital and finding new investment opportunities.
• Budgeting: More forward-looking responsibilities of FP&A include planning the budget and forecasting the company’s future financial performance. Budgeting requires parsing through financial reports to determine how to allocate money. Forecasting requires creating financial models that account for trends within the business and in the broader industry and economy that may affect revenue and profit.

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· Scenario Planning: One type of financial modeling is scenario planning, a process in which FP&A employees map out best-case, expected and worst-case scenarios by plugging in different numbers for sales and order volume to see how it would impact the company’s financial position. Three Roles of FP&A Teams Although job titles and roles of FP&A team members will vary by company, here are common titles and their respective responsibilities: Corporate Financial Analyst

• Analyze financial data and use financial models for forecasting.
• Track revenue and gross margin by business unit and expenses by cost center.
• Prepare reports on financial performance tailored to the needs of leadership.
• Evaluate financial performance by comparing and analyzing actual results with plans and forecasts.
• Study and analyze trends and forecasts to inform recommended actions.
• Establish policies and procedures that guide cost analyses.

FP&A Manager

• Work closely with the leadership team to formulate short- to long-term financial and strategic plans.
• Analyze financial and operational results to better understand the company’s overall financial health.
• Evaluate previous budgets and collaborate with business unit leaders to build their annual budgets and forecasts.
• Produce models to project long-term growth, accounting for factors that will impact performance.
• Provide detailed analysis and commentary on the performance of a product or department.
• Communicate results and recommendations to senior management that will lead to revenue generation, cost reduction and more efficient operations.

Director of FP&A/Vice President of FP&A

• Own the process for preparing financial statements and financial models, including scenario planning.
• Define processes for monthly, quarterly and annual financial budgeting, forecasting and long-range planning.
• Drive and improve existing management reporting to be more accurate and timely.
• Analyze financial results to determine key takeaways and recommendations for senior management.
• Lead ad hoc financial modeling and reporting for special projects.
• Partner with IT and the broader organization to improve forecasting through automation and system optimization.

Key FP&A Functions   Performing financial planning is critical to the success of any business. It supports the business plan and sets forth a process to ensure the objectives set are achievable from a financial point of view. Adequate financial planning and analysis creates an understanding of how well you project your business will do and measures your success relative to that projection. The process is ongoing and should serve as a shrewd guide to running your business. 1: Save time and money with driver-based planning Management teams are at the risk of “flying blind” if they do not accelerate the transformation of the planning function. As senior leaders face uncertainty, they are looking for a better dashboard— including the ability to have early warning signals for decision making and the tools needed to react quickly when business conditions change. First, it requires a shift from a linear, static planning process to a process where forecasts are “always on” and refreshed with limited manual intervention. Second, it requires a shift from disconnected to integrated planning. Here, all forecasting models and calculations are brought online and are connected to the planning infrastructure — enabling highly automated forecasting with insight generation based on drivers of business performance, ‘what if’ analyses, and real-time transparency into enterprise profitability measures and regulatory constraints. Generating insights based on business performance drivers is a core element of CIP. By setting up driver trees during planning, businesses can have more transparency into what is driving forecasts. This incorporates both financial and non-financial performance levers and does so at an appropriate, fit-for-purpose level of granularity — focusing on the most material drivers. It allows businesses to create a total revenue project and actively monitor against it. Results: Our clients who have implemented driver-based planning find that it enhances transparency and improves active monitoring and early warning. Driver-based results generate richer and more strategic planning discussions, while allowing planning teams to focus on the most material drivers of performance and monitor them on an ongoing basis.  Role of Strategic Financial Planning and Analysis Essay Paper 2: Invest in the talent of your finance team Forecasting and planning efficiency gains, while sizeable, are only a small part of the equation. With a greater focus on insight generation, businesses need to invest in FP&A talent that has a combination of intellectual curiosity, strong communication skills and technical savvy. For example, recruiting talent with excellent interpersonal skills is a ‘must have’ as FP&A takes on a more strategic advisory role to the CFO and builds trust-based relationships with business leaders. Talent also needs to be well-versed in advanced analytics and technologies so they can analyze complex data, identify trends and consider business implications over multiple dimensions and timeframes — all while effectively running the financial planning and analysis process. Results: We have helped our Finance clients to determine the right mix of talent for their team and expand the role of FP&A from number crunching to strategic advisor. For example, we recently helped a European multi-national firm redesign their FP&A function, with a large focus on the organizational component. A key component of this included defining the skills sets needed for each of the roles within the function, and determining training curriculum and other development experiences to realize these skills. This included a rotation for key roles throughout the business to build the broader business acumen and enable a successful FP&A function for this CFO in the longer term.

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3: Establish proximity to the overall business Although FP&A functions can be structured differently, it’s important for Finance teams to operate as a true advisor to the business. Strategic planning and forecasting require agile working styles across teams. First, Finance needs to establish a greater partnership and receptive buy-in from senior management, and then develop an organizational structure where business CFOs and forecast analysts have enough proximity to the business. Building this acceptance and strong linkage can be beneficial for organizations, helping them to enhance communication and decision making and further drive profitability. Results: To help our Finance clients improve organizational infrastructure and Finance’s proximity to the business, it is important to develop a common view of how the FP&A function should operate and support the business. We have worked with numerous organizations on the operating model aspects of FP&A, either alongside a broader Finance transformation or independently as an operating model/organizational design project. In either situation, the result is establishing a model that has Finance positioned to better support the business in the decision making they need, while internally structuring operations to be more efficient. Achieving more dynamic insight through financial planning and analysis allows Finance to have a greater impact and improve business results. FP&A teams can focus on challenging the forecasts and ultimately developing better plans with richer ‘what if’ capabilities and a clearer view into the drivers of revenue and expenses. Improvements in FP&A should focus on developing processes, infrastructure, systems and teams that are: (1) Technically seamless to meet rapidly changing market demands; (2) Agile and drive better decision making when underlying conditions change; (3) Strategic with improved driver- based monitoring and business proximity; and (4) Well-integrated within the business so that insights are delivered in a timely manner and well-structured for the business to utilize them.  Role of Strategic Financial Planning and Analysis Essay Paper