In many middle market businesses, this is a role that is performed by the CFO, or by a Financial Controller or Director of FP&A with direction from the CFO.
The objectives of the Financial Planning & Analysis function, or FP&A as it is commonly known, are to:
- Evaluate and forecast the company’s operating and financial performance in relation to its strategy;
- Support senior management decision-making and to detect emerging opportunities and threats;
- Design/define the accounting information required to provide accurate and meaningful analysis;
- Create reports to meet compliance and management objectives;
- Communicate issues for management response/action;
- Create dashboard reports to measure all Key Performance Indicators (KPI’s);
- Prepare budgets, interactive models for “what if” analysis, forecasts and track actual results compared to budget.
Many Financial Controllers or lower level accounting professionals can be competent in the Controllership function but may completely lack the skills to successfully perform the FP&A function. Similarly, many FP&A professionals are poorly suited to manage the Controllership function. A good CFO needs to have both skill sets.