The FP&A Guide

End-to-end, this free guide will teach you everything you need to know to run a high-performing FP&A team. Enjoy!

Brett Hampson

Founder of Forecasting Performance

How does FP&A add value?

There's a fierce debate in the world of FP&A centered around a single question: How does FP&A add value to a business?

Old-school (my words) CFOs and FP&A professionals will say that Finance doesn't directly add value to a business. Instead we help the business optimize around its vision, goals, and desires.

New-school CFOs and FP&A professionals will argue that Finance should partner so closely with business leaders that Finance itself is directly driving the value in the business with increasing revenue or decreasing expenses (or whatever else).

Regardless of your stance, it's clear that FP&A's role in driving value in the business is through partnering with business leaders to achieve their goals.

And FP&A does this in 4 unique ways - I call it The FP&A Operating System:

The FP&A OS

The FP&A OS (Operating System) is my framework for how FP&A is uniquely positioned to add value to a business. Think about each department of a business as adding value in a unique way (HR = hiring, onboarding, and retaining great talent; Marketing = creating demand for products and services)

FP&A is no different. We add value to the business in 4 unique ways (Reporting, Analysis, Forecasting, Consulting) all sitting on a foundation of high-quality people and data/tools.

Let's explore the 4 value-added elements of The FP&A Operating System so you can learn to drive value with FP&A (the rest of this guide will deep-dive each of these elements):

Reporting

The foundation of any great FP&A team is great reporting. This guide will work through what a healthy reporting ecosystem looks like and how you can create best-in-class reports without spending your entire month on reporting.

The reason reporting is the largest piece of the pyramid (and the base) is that FP&A reporting should cover all critical metrics and KPIs that drive the business. This doesn't mean it should take up the most time - in fact, I argue that reporting should take up less of FP&A's time than analysis.

Analysis

Uncovering the root cause of the change in results is easier said than done. This guide will teach you the techniques you can use to provide action-oriented analysis for your company.

Analysis is the simple (not easy) act of evaluating your business results via your reporting and turning that information into a clear storyline for business leaders to take action on. There are tons of different ways to organize and execute analysis (variance, root-cause, statistical, trend, etc.) and the best FP&A professionals know when to leverage each technique.

Forecasting

Forecasting is the holy-grail of FP&A. This guide will break down how to use your analysis to predict the future. This will span both financial accounts as well as non-financial KPIs.

At its core, forecasting is the act of attempting to predict the future of the company's performance leveraging data and insights. And FP&A is the single team within a business that is uniquely positioned (access to data and department leaders) to create a valuable forecast for investors, leaders, and lenders.

Consulting

Once you've done a ton of great work in reporting, analysis, and forecasting you need a way to communicate it so your company will take action. This guide will show you how to build trust, communicate proactively, and create value for your key stakeholders.

Often referred to as "business partnering" FP&A acts as internal business consultants to help drive the business towards achieving its goals. This creates interesting dynamics and tensions (some healthy, some not) that requires expertise to learn to navigate.

Next up: Reporting

Reporting is the foundation of great FP&A - but if we aren't careful, we can get sucked into spending our entire month on building and updating reports.