A Step-By-Step Guide to Finance Business Partnering

Companies around the world continue to grapple with economic, technological, competitive, and major geopolitical changes. Finance business partnering is in a position to create strategic advantages for companies looking to be more successful and beat out the competition.

Today, businesses are eager for financial advantages that drive performance. It’s not surprising that business leaders are searching for active partnerships from the finance department. For this reason, finance business partnership teams serve as the centre of intelligence, information, and decision-making.

These strategic partnerships can analyse financial information, offer strategic insights based on the specific industry, macroeconomic trends, and computer dynamics. With this information, FP&! Teams are able to provide recommendations that enable business leaders to make strategic decisions regarding their companies.

Why is It Important to Establish the Finance Team as a Business Partner?

In the past, finance teams played an essential role in FP&A (Finance Planning & Analysis), core financial decisions, controls, and compliance. Today, finance teams are expected to collaborate with business departments to support strategy and decision-making, as well as encourage finance and company-wide transformation.

A beneficial finance partnership becomes involved in searching for the right data and learning about business processes and operations. They explore the data to see what it’s telling, developing business insights from the information that’s been gathered.

In other words, finance teams generate insights supported by data and provide value by influencing their business counterparts to make better decisions.


What is a Financial Business Partner?

A financial business partner is a financial or accounting professional that works with a business to track financial performance and offer financial information, forecasting & analysis to guide decision-making and company strategy.

The FBP must, at times, challenge the business with the goal of ensuring a strategic path is chosen & creates desired value at acceptable risk levels.


What Does a Financial Business Partner Do?         

The role of a financial business partner can include the following:

Turn opportunities & threats into business drivers: successful FBPs are able to turn opportunities and threats from external sources into business drivers. Highly effective FP&A departments act as an advisor for their organisation.

Leverage enablers & anticipate constraints: finance business partners also know how to utilise the right facilitators and are able to anticipate constraints. For instance, FBPs need to have consistent, real-time information and avoid focusing on activities that don’t add value to their company.

Use technology for a competitive advantage: financial business partners must also make successful use of ever-changing developments in technology and automate their transactional activities to stay competitive.

Search for the future: financial business partners also need to watch for new insights that arise from in-depth analysis and know how to communicate this information effectively to stakeholders to ensure adequate access to business performance.


Is a Finance Business Partner an Individual Role or a Team Responsibility?

A finance business partner is usually a team that considers methods that they can use to work with the rest of the company. The team’s responsibilities make it a strategic business partner. FBP usually performs the following roles:

Controller: they put the focus on comprehending the business and controlling the cost under budget with accuracy. This includes historical analysis and ongoing forecasts.

Advisor: the team also acts as an advisor that focuses on building relationships with both internal and external stakeholders and performing “what if” scenario analysis on the impact of significant business decisions.

Influencer: promotes financial modelling and driver-based planning to identify the organisation’s key business and valued drivers while creating business plans and budgets based on these drivers.

Strategic partner: the financial business partner also promotes scenario planning to find the set of uncertainties and drivers that may impact results and protect the business from unnecessary risks and decisions.


How to Establish Your FP&A Team as a Strategic Business Partner

In order to establish your FP&A team as a strategic business partner, it’s necessary to transform the function and change the mindset of business partners.

For this to happen, the FP&A must play an essential role as it helps the business become more agile, data-driven, and forward-thinking using the following methods.


Adopt FP&A Best Practices

These include the following:

  • Conducting financial analysis to identify trends and patterns in the company’s financial processes.
  • Prepare reports that management can use to develop the company’s operational and financial success.
  • Work with departments in the organisation to collect financial data and combine it to create the company budget.
  • Create, maintain, and update financial forecasts and financial models.
  • Prepare detailed reports and presentations to support decision-making for stakeholders.


Automate Manual Processes

During these volatile times, the FP&A team must reconsider the models they use to create financial forecasts and plans. There has been an increased focus on building scenarios first and thinking about their implications for the business.

However, it’s also necessary to identify new performance drives and create financial forecasting models so that the outcomes can be tied more closely to drivers within the organisation and economic variables.

Finance teams must also develop driver-based plans that grant them a significant advantage over less sophisticated approaches.


Standardise Data & Definitions of Data

Another way for FP&A teams to become more valuable as strategic business partners is to standardise the data-gathering and analysis process.

The value is in creating a clear understanding of the factors that are having the greatest impact on the financial planning of the company. Enhanced data allows decision-makers to move forward and make strategic decisions that bring success to the organisation.


Adopt Cross-Functional Collaboration

Finance has traditionally had the responsibility of collecting information from across the organisation. Today, strategic business partners are expected to work with other departments across the business. It’s not enough to compile the data; more time needs to be spent on analysing the data and understanding key business drivers, and using this data to drive meaningful discussions to achieve strategic targets.


Concluding Thoughts

Successful finance business partnering is an effective method to drive business outcomes, not only predict them. The best business partnerships are those that develop a clear roadmap for the transformation of finance, with FP&A driving financial success.

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