The FP&A Squad: Financial Agents for Change
Henry, Kasthuri V., Strategic Finance
Snooze and you lose.
It's an old saying (well, perhaps not that old), but it captures the essence of what every company in the current global economy needs to do to be successful: Be mindful of its strategic mission while building the trust of employees, customers, suppliers, investors, and even regulators. It's a daunting task, to be sure, but businesses that aren't agile enough to react when the windows of opportunity open will fall flat, and those that keep their eye on the ball will rise to the top. A corporation's success is predicated on competing effectively for scarce economic resources in a tight economy by remaining congruent to the organizational mission while focusing on the intended strategic vision. Doing so builds on the firm's reputation to garner employee commitment, customer loyalty, investor confidence, and regulator trust by upholding good governance, effective enterprise risk management, and responsible regulatory compliance.
It sounds simple enough, but advocating and adhering to these standards of diligent stewardship is no easy feat when times are good, and the challenges are magnified when times turn rough. Navigating these interdependent challenges requires an organizational culture rooted in learning from itself to effectively groom change agents capable of shaping and controlling the business process with a deep understanding of the root causes. These financial "superstars" should be part of a learning organization's Financial Planning and Analysis (FP&A) team, capable of looking multiple layers beneath the financial statements, establishing the various dependencies of the operational processes, and predicting, with forethought, the ramifications of their advice.
The Evolving Role of FP&A
Traditionally, the FP&A team focuses on providing support to upper management to help them make effective and timely decisions. Members of the FP&A team include financial accountants, as well as management accountants who have earned the CMA[R] (Certified Management Accountant) designation, who drive the processes of long-range planning, annual budgeting, ongoing driver-based forecasting, financial analysis, and decision support. In keeping with the IMA[R] Statement of Ethical Professional Practice, the FP&A team is responsible for functioning with integrity and in an unbiased manner to provide consistent, reliable, relevant, and meaningful information. Needless to say, these internal guidance providers must emulate the utmost level of principled leadership so they won't compromise the fundamental inputs driving all aspects of business decision making. They ought to embody good governance by exhibiting transparency and full disclosure, understand the need for effective risk management, and present unbiased information to allow the decision makers to weigh all the pros and cons for sound decisions as well as plan for contingencies. If anyone on the team is …
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Publication information: Article title: The FP&A Squad: Financial Agents for Change. Contributors: Henry, Kasthuri V. - Author. Magazine title: Strategic Finance. Volume: 93. Issue: 10 Publication date: April 2012. Page number: 37+. © 1999 Institute of Management Accountants. COPYRIGHT 2012 Gale Group.
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