The Ledger
Curated content foranalytical business leaders
Tag Archives: FP&A
FP&A Becomes More Visible to Senior Leaders
May 20, 2020
“FP&A professionals noted that they were taking part in an unending task of analyses and sensitivities; nearly one in three practitioners are producing a reforecast every day. This may sound trivial, but as Jack Alexander noted in his video interview, FP&A needs process discipline when developing and evaluating forecasts and scenarios. There are an infinite number of scenarios and a finite amount of time.”
Modeling Through the Current Crisis
May 14, 2020
“Creating financial and operating models is critical to creating alignment across the enterprise, and FP&A professionals are making numerous scenarios to understand actions, impacts and options. FP&A professionals have a sober view of the duration of this crisis, with 66% creating financial models that assume the crisis will last for three quarters or more. This was consistent across companies of all revenue sizes.”
Six Considerations for CFOs Managing Through COVID-19
April 30, 2020
“Downturns and recessions are challenging, but some businesses are not only able to come out intact, they are also able to seize opportunities to outdistance their competition and position themselves for future growth. Still, the speed at which the COVID-19 crisis is unfolding may likely require CFOs to use new tools — virtualization and scenario-based forecasting, for example — in addition to the traditional levers they have used to act swiftly and reasonably. Still, the speed at which the COVID-19 crisis is unfolding may likely require CFOs to use new tools — virtualization and scenario-based forecasting, for example — in addition to the traditional levers they have used to act swiftly and reasonably.”
CFOs Need Models to Understand How Shifting Customer Needs Affects Resources
April 13, 2020
“One of the quirks of the downturn in retail has been an increase in shirt sales while pant sales have dropped, presumably because people participating in video conferences while working from home are paying more attention to their appearance from the waist up. Whatever the reason behind the trend, CFOs can model that kind of change to justify a shift in how resources are allocated within the business. But to pay off, the modeling has to be done in as close to real time as possible. ”
Can Your Analytics Program Handle a Downturn?
April 9, 2020
“Here are two thoughts that are useful for calibrating analysis: (1) An analytics system is only as good as the analysts and the sophistication of the toolsets they employ. (2) A truly next-gen analytics program must encourage analysts to take advantage of the technology tools they now have at their disposal.”
Making Better Decisions is Both Art and Science
April 1, 2020
“External factors will always have an impact, and this includes luck, as good and bad fortune can clearly be influential in determining success or failure. But a sound internal approach to decision-making will insulate the business from this, while also mitigating the stress attached to making decisions.”
The 12 Key Principles of Financial Planning and Analysis
February 26, 2020
The Institute of Management Accountants has developed a list of 12 key principles of FP&A based on learnings from a recent survey of 700 organizations that identified the best-run companies — those that both consistently meet or exceed targets they set for themselves, and consistently meet or exceed their competitors’ results. Principles include developing a long-range plans and specific initiatives, understanding plan-to-actual variances, holding people accountable, and monitoring results and KPIs.
The Relationship Between Accounting and FP&A
February 24, 2020
Many people in the finance and accounting industries would agree that accountants know finance, but not all finance personnel understand accounting. Granted, both functions have different skill sets and responsibilities. It may be an oversimplification, but accounting departments are focused on what has happened, whereas FP&A uses the information provided by the accounting department to posit what might happen.
A Futurist’s Framework For Strategic Planning
September 23, 2019
When it comes to long-term planning, many FP&A professionals should be able to answer these questions: Where do you want to have impact? What it will take to achieve success? How will the organization evolve to meet challenges on the horizon? These questions are the foundation for any achievable plan, both long and short term. Many businesses get stuck cycling between strategy and tactics, and while that process might feel like serious planning for the future, it results in a perpetual cycle of trying to catch up: to competitors, to new entrants, and to external sources of disruption. “Futurists” see their planning timelines as more of a cone that measures certainty and charts actions, rather than simply marking the passage of time as quarters or years. The result, ideally, is a flexible organization that is positioned to consistently and effectively respond to external developments.
Read More at The Harvard Business Review >
