FINANCIAL PLANNING AND ANALYSIS

In this era of the digital world, businesses are more preferred than jobs. Young individuals are heading
towards their businesses. Financial planning and analysis is the process that includes business
techniques and strategies. It relates to forecasting, budgeting, and analyzing the cash flows. FP&A
managers and analysts possess the responsibility of assisting the senior managers in making more
informed financial decisions.
Financial planning and analysts maintain the company’s future forecasts and annual budgeting
processes, which help analyze the company’s financial position and performance. They analyze the
company’s past trends, and regular forecasts, defining their impact on the future performance of the
company. This helps improve the performance of the company and advice the company’s growth
scenarios. They may get in touch with the seniors, comparing the budgeted forecast with an actual
forecast, examining the areas that differ from the budget, and informing the management of future
progress. FP&A plays a vital role in the business position and performance, by analyzing the past trends
and prospects.

THE VITAL ROLE OF FINANCIAL PLANNING AND ANALYSIS IN THE BUSINESS:

The role of financial planning and analysis is way more essential than any other stakeholders. FP&A plays
a significant role as it assists management to effectively and efficiently apply the cash flow and investing
capital effectively with strategic planning to ensure the goals are achieved.
For public listed entities, FP&A has an important role, allowing the organizations to allocate their
resources accurately. Guiding net income and revenues to shareholders of the company, based on the
analysis which has a major effect either direct or indirect on the share price. FP&A’s role in the company
makes it a central location between the corporate and operational services, other areas including sales,
marketing, accounting, and treasury.

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KEY OBJECTIVES:

It consists of all measures regarding coordination with the finance and service divisions of the company.
Maintaining liquidity is the key objective. Financial planning and analysis also evolve around
consolidation which includes brief financial reports, fast and comprehensive financial statements, and
control. In addition to maintaining liquidity and profits, enhancing the share price is an objective.
FP&A setups and utilizes the resources in a way that enhances the value and profit.

FP&A TEAMS FINANCIAL HIERARCHY:

FP&A is reportable to CFO, specifically, FP&A is granted with budgeting and forecasts of past and future
trends and aspects. They are mainly linked with the planning and strategic decision-making of the
financial elements.

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KEY FP&A FUNCTIONS ARE:

Some of the key financial planning and analysis functions, that have a major impact on the operations and decision making :

• Planning:

➢ Strategic planning
➢ Financial planning
➢ Budgeting

• Support And control:

➢ Project supervision
➢ Financial analysis
➢ Accounting/tax estimations
➢ Internal/external audit

• Management reporting:

➢ Performance
➢ Revenue and expense allocation
➢ Customer/producer profitability

• Specialized experience:

➢ Risk management
➢ Real estate management
➢ Acquisitions

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KEY RESPONSIBILITIES OF FP&A:

FP&A plays a significant role in the business, will defining its position and performance by analyzing the
past trends and suspecting future goals. With FP&A businesses flourish to heights through strategic
decisions taken by them to achieve the organization’s goals and objectives. Some of the key
responsibilities of FP&A are as follows:
Discussions with senior heads to maintain their annual forecasts and budgets, to
consolidate them in one.
Working with senior management to assist them in strategic planning and financials.
➢ Examining the operational and financials past trends to suspect future outcomes.
➢ Analyzing the market trends and competitors engaging with management for decision
making.
➢ Creating long-term financial models and determining the impacts on business factors.
➢ Considering the company’s gearing ratios, and ability to continue work in the future.
➢ Analyzing whether the company’s current assets and investments are in collaboration
with the excessive working capital.
➢ Preparing detailed and informative analysis on the business units and reports.

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CAREER COMPETENCIES:

As FP&A is responsible for business planning and progress, investing in the performance of the bus, they
need to be competent and well adapted with the knowledge of market techniques and strategies. FP&A
requires a competent and determined professional, with standard knowledge and experience.

1. Consultancy:

FP&A collects the knowledge relating to financial and non-financial factors that help to
determine the profitability of the business and future aspects. To develop a complete and
comprehensive knowledge of the business environment and units. Assisting the company with
competent advice to improve operations. Advising on business strategies and plans, preparing
the reports.

2. Management accounting and reporting:

Directs organizational performance and management by analyzing the key financial and non financial factors. Directs the use and operation of modern techniques and technologies to
improve decision-making.

3. Financial management:

Development in trade, markets analyzing the risk factors and management of risk. Advice on
appropriate management of business operations and performance.

4. Stakeholder relationship management:

Helping develop positive and friendly relations with both internal and external stakeholders.
Maintaining the goodwill of the company by keeping the standards high. Applying ethical and
professional judgments to with the stakeholders, maintenance of strategic knowledge to align
with the expectations and needs.

5. Innovations:

Adopts new and modern market methods to help cater to all the downfalls, recommends a
range of suitable strategic operations, access commercial awareness to implement modern
options.

 

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