00_FP&A_Section_02_PPT_16.pptx
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Financial Planning, FP&A, FP & A, Financial Reports, Budgets, Forecasts, Variance, Actual, Comparison, Financial Statements, Projections, Scenarios
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00_FP&A_Section_02_PPT_16.pptx
- 1. 1. What is FP&A 2. Position in the Organizational Chart 3. Education background / Foundation for FP&A 2. Position of FP&A in Organization 4. FP&A Consists of . . . 5. Examples of FP&A Reports 6. FP&A – techniques and methods 8. Starting FP&A 7. Future of FP&A call Cliff (949) 813-1349
- 2. 2.1 Size (of a company) is Relevant Large Corp – CFO has both an FP&A director and a Controller as direct reports – each with their own staff Medium Corp – CFO has both an FP&A position and a Controller as direct reports Small Corp – CFO may double as Controller – does own FP&A
- 3. CFO function: CFO is the financial mastermind Controller: Manages the accounting and the financial reporting FP & A: Responsible for planning, budgets, decision support and financial modelling 2.2 Company positions
- 4. The place fulfilled by the FinancialP&A team is pretty well dependent on what the CFO requires. FP&A supports the CFO efforts (and a career as a FP&A specialist could even become a path to the CFO position) However, it depends upon what priorities dictate at the time. International CFO functional differences have been trended: Europe >> senior controller Asia >> growth and finance USA >> SOX and stewardship FP&A is emerging as a CFO support function) 2.3 Depends on what the CFO wants!
- 5. Plan Planning and budgeting Annual operating Plan Budgets Headcount planning Long-term planning Reports Operations Financial KPI’s Dashboards Variance analysis Drill down/across etc Assessments Rolling forecasts Trend analysis Predictive analytics Financial Modelling What-if analysis Scenario analysis 2.4 Typical FP&A Decision Making
- 6. Overall pictures Broader View from 20,000 feet Trends The Story behind the numbers Understanding the why Changing roles 2.5 Changing Roles for FP&A
- 7. 2.6 FP&A – 2 Positions in Typical Org Chart CEO FP&A HR Accounting Admin Supply Manufacturing Inventory Operations FP&A Marketing Sales Business
- 8. 2.7 Key Functions – choose which for FP&A
- 9. - Senior Financial Analyst – Financial Analyst – Finance Manager – Head of Long-Term Planning & Budgeting – Director of Finance – Manager, Financial Planning & Analysis – Principal Financial Analyst – Director, Financial Planning & Analysis – Vice President, Financial Planning & Analysis – Business & Planning Analyst - Director, Business Planning – Business Controller – Finance & Accounting Manager – Director, Budgeting & Financial Analysis – Director, Strategic Data Analyst – Manager, Business Planning & Strategy – Director, Budgeting & Analysis – Budget & Financial Analyst – Business Analyst 2.8 Various Typical FP&A Job Titles
- 10. FP&A professionals in general oversee a wide array of financial affairs that include: • financial statements • capital expenditures • expenses • taxes etc Financial analysts in particular are tasked with: • evaluating, • examining and • analyzing a corporation's financial activities and • mapping its financial future 2.9 Is FP&A the same as Financial Analysis?
- 11. Financial analysts evaluate a company’s past and present and (maybe) projections of financial data. Typical job responsibilities include: assessing financial data preparing written reports giving presentations studying business trends appraising a business’s financial statements potentially meeting company management: to determine how a firm is doing and to evaluate the leadership team 2.10 Financial Analyst
- 12. An analysis of current positions reveals the following: Entry level (1-3 Yrs) – bachelors degree - Modeling using tools/s <$100k Senior analyst (3-5 yrs) – supervises juniors (CPA perhaps) $100 - 120k FP&A Manager (5-10yrs) - CPA + MBA $120 - 190k FP&A Director (>10yrs) – Capable of Groups/Consolidations Department head $190 - 250k The avg (reported by Talend Inc, Tatum, McDermott, Equinox, McKesson) from 382 US salaries = $90k Robert Half Salary Talent Solutions survey 2022 (for LA - 33% higher than US avg Mid-point = $110k) Beginner (Little prior experience) $ 88k Mid-level (some prior experience) $110k Advanced (Has relevant skills) $128k 2.11 Salaries of FP&A People
- 13. IS YOUR LIFE NOW CHANGED? The End
- 14. 14 CliffB
Editor's Notes
- The second area we will cover is the likely position of FP&A in an organization
- Company size matters.
- FP&A is emerging as a separate role to the Controller although probably on the same level in the organization hierarchy
- Depends on what the CFO wants! This realm includes a wide look at the future. While accounting and control covers past and present FP&A (so-called) looks to making it happen - considering the objectives of a business (a group, company, conglomerate). It can be said that this field falls under the responsibility of the CFO – who looks to the future rather than the past. The CFO should/may prioritize making it happen. The place fulfilled by the FP&A team is pretty well dependent on what the CFO requires. What the correct recipe is depends – let’s leave it there and examine the FP&A functions. However, if a CFO does not have such a function (also if she/he does it themselves) they may find themselves ‘judged’ for it
- Typical functions of an FP&A dept - an ongoing cycle
- It has not been finalized but there are some speculations that FP&A is attempting to take-over more than it should. Time will tell and it is wise to remember that all companies are different – however this page says they are all connected
- This shows the separation of FP&A into 2 different departments – since the information requires different skills. As a peek at what is in section 6 of this set of presentations and discussions, it is hinted (strongly) that FP&A will become more independent of Accounting and Finance – BUT the financial part will always require the involvement of people who understand the advanced finance and accounting professional – such as CPA, MBA – because they MUST understand the data/information – see further discussion in the FUTURE section
- Here are some of the functions that could be covered in the Finance/Accounting arena.
- And here are some of te job titles that might describe a Financial analyst role
- It is important to realize that this slide only covers traditional functions – new areas have been established in the exploratory direction – which may be better described by a title such as Data Analyst.
- cc
- What does the FP&A function include: This can be examined in light of the objectives (providing they fall within the requirements of the CFO). Determining the required information and how to get it. Storage Analysis Reporting Techniques needed are defined by the requirements. There are various tools available but the crucial point is: The objectives drive the effort and methods Deadlines are merely part of the target output. Eventually the timing has to be achievable at the level of quality (completeness, accuracy and reliability needed). If quality cannot be achieved within the timetable then action is needed to ‘make it happen.’