The job of an FP&A – Financial Planning and Analysis – manager can be fraught with problems, and it is important that they never take their eye off the ball. Finding data anomalies is vital and once they are found, it is their job to put a plan in place to mitigate problems. Sometimes this job will have to be carried out by the owner, but if funds allow, it will be ideal to have someone else carry out the role.
Responsibility of the FP&A Manager
- A major part of the role will be to create systems and processes and making sure that someone ensures that all staff is aware of them. If any area is not working in the correct way, the figures can be skewed and every department can eventually be affected.
- Analysing the cash flow. Initially this will be in the short term, but if it is possible to forecast long range, this will be ideal. Explaining how to rectify things if targets do not seem to be obtainable will also be part of the remit.
- Check that internal controls are robust. Any controls that are not fit for purpose should be altered as a matter of urgency. Here they will be partially dependant on others explaining where there are problems in their area or department.
- Understanding exactly where the company is financially and can answer questions regarding financial projections and cash flow always. Management could want up-dates at very short notice, and while some leeway may be given for vague answers, there must be a credible explanation most of the time.
A Day in the Life of an FP&A Manager
There will be a lot of general office work carried out – making phone calls, dealing with emails, and taking part in team meetings. It could take a few years to start moving up the corporate ladder, so formative years should be spent learning as much as possible. Profit and Loss Statements will have to be produced and they will have to work towards identifying net income. Mathematical and computing skills will be vital and a lot of the day will be spent number crunching. One thing that must be learned is explaining the figures to other managers. Speaking in the terms of their department will not be useful for managers of other areas, so reports must reflect all levels of the business. It is not only important to give the information, but be the catalyst for improvement.
Variance analysis and data consolidation needs to be addressed and large parts of the Financial Planning and analysis Manager day will be spent looking ahead and imaging what may happen – and by this is means what realistically may happen. SWOT charts are going to help here. This is where there is a plan showing Strengths, Weaknesses, Opportunities and Threats, and managers can work out what can happen in each category. Understanding the worst that can happen and the likelihood of it happening can make future financial planning easier.
Getting the SWOT chart filled in is not the end of the journey as the data needs to be put into a report – and remember it must be an easy to explain report. Putting the details down on paper will make it easier for each department to understand what could happen if they are not on the top of their game and what they can do to prevent things going horribly wrong. The role of an FP&A manager is not just a matter of understanding figures, but having the ability to explain what is happening to others and seeing into the future at the same time. Learn more about “what is fp&a” on our website .