FP&A partnerships are increasingly becoming important in today’s fast-moving global economy. Their work in collecting and analysing data is more essential than ever before. Yet, FP&A is not always involved in the decision-making process that determines the direction of a company. It’s through business partnering that FP&A can become a key driver of value rather than being a passive reporting operation.
Who are Finance Business Partners?
Financial Planning & Analysis is a business partner that provides financial and analytical information to decision-making teams. The FP&A business partner is more than a general finance business partner. The FP&A partner works more as a data analyst, making this a very influential and strategic role.
Within a finance business partnership, the FP&A business partner has the duty of aligning the operations of the FP&A teams with the core operations of the company. While the work requires the FP&A partner to be a “number cruncher,” they also perform collaborative work that brings their team in sync with the entire company.
Once this has occurred, the FP&A teams can then use their financial knowledge to help identify opportunities for growth, change and enhance performance.
What is the Structure of an FP&A Team?
In general, FP&A teams can be organised in three different ways:
- Geography: is generally used by multinational companies that want FP&A teams to provide local knowledge and support for leadership.
- Functions: is used when FP&A teams are required to only handle specific functions.
- Line of business: FP&A teams are organised to provide support to different business lines within an organisation.
The structure of FP&A teams is similar across organisations and features individuals handling the following roles:
- CFO: the Chief Financial Officer leads all finance functions. It’s the CFO’s duty to communicate reports and analyses prepared by FP&A teams to the CEO, business partners, and other stakeholders.
- FP&A Director: links the CFO and the FP&A analysts. The director can act as the FP&A manager, too, by overseeing the day-to-day operations of FP&A teams.
- FP&A analysts: handle the day-to-day operations, including data collection and analysis related to the financial performance of the company. They are also responsible for financial modelling and forecasting to determine future trends.
Each member of the FP&A team has the responsibility to determine the need for major financial decisions and communicate this information to key decision-makers within the organisation. In addition, the team must develop a business partner mindset rather than only being the “number crunchers.” The team can become part of the partnership in the following ways:
- Collaborative partners: team members can leverage their abilities to collaborate and connect with the entire organisation. And they must work to have access to the key stakeholders and management to begin conversations and make an impact on the decision-making process.
- Work as supporters: the team must also have a perfect understanding of the organisation’s needs and goals. For this reason, the teams must work to be competitive, cost-effective, value-driven, and customer-focused.
- Focus on growth: FP&A business partners also need to develop an in-depth understanding of what drives the organisation’s growth. With this knowledge, they can focus on growth drivers for the company.
Using these methods, the FP&A business partner and its team can become an influential, trusted partner to the organisation.
Why is It Important for FP&A Teams to Become a Business Partner?
Today, FP&A teams are no longer performing only their traditional duties. That is not effective in today’s fast-moving and changing global economy. FP&A teams must now work with the top decision-makers of a company. Here are some tips to help FP&A teams work to become a business partner:
- Adopt FP&A Best Practices
It’s essential to identify the best FP&A practices and then adopt them as part of an everyday routine. To determine best practices, develop a deep understanding of the business, its key drivers, customers, and stakeholders. With this understanding of the organisation’s performance goals, FP&A teams can define the best practices to use.
- Automate Manual Processes
FP&A teams must also automate all manual processes, including the integration of a comprehensive FP&A platform. This can save time for more essential tasks, such as data analysis.
- Standardise Data & Definitions of Data
FP&A teams take ownership of the data collected from across the company. They must standardise the data and data definition. The goal is to become the source of truth across the entire company, with decision-makers on all levels having access to updated data. Standardised data and data definitions provide all stakeholders with the data they need to stay informed.
- Invest in an Integrated Business Planning & Analysis Tool
FP&A teams will also find it beneficial to invest in an integrated business planning & analysis tool. The goal is to streamline data collection and analysis. With an integrated tool, FP&A teams can increase the efficiency of their tech stack and ensure improved accuracy of their analysis and insights delivered to decision-makers. FP&A teams will also find they have more time to help with the decision-making process at all levels.
- Adopt Cross-Functional Collaboration
FP&A teams operating in one department or with multiple teams must take on the leadership role when possible while supporting other stakeholders. The business partnership means FP&A teams must provide cross-functional collaboration when they provide assistance to other teams.
- Spend more Time Developing Insights & Forecasts
FP&A business partners should also focus more time on developing insights and forecasts. They can do this by automating manual tasks related to data collection and sanitation. With more time spent on developing insights and forecasts, FP&A teams can partner with the CFO and other stakeholders during the decision-making process.
- Encourage the Entire Company to Understand the Value You Deliver as a Department
Establishing effective communication between departments and stakeholders is essential for FP&A teams to establish their role as business partners. The entire company can then see and appreciate the value the FP&A department brings to the organisation.
Concluding Thoughts
FP&A business partnerships don’t have a one-size-fits-all approach when working with organisations. Each company is unique, and it takes unique strategies & processes to guide the decision-making process with each one.
The one thing FP&A teams can count on is that they must establish best practices for each business. Establishing effective communication and collaboration are also beneficial to establishing themselves as effective business partners with their clients.
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