More organizations are treating their finance teams as a strategic asset to realize growth, rather than an obligation.

Better FP&A requires a bottom-up approach

The role of an accountant in a corporate setting has long been stereotyped as boring and perfunctory. Likewise, the many roles related to the task of bookkeeping were considered low-risk and low-return, including the CFO. But the swift pace of technological progress has reshuffled the deck in the business world, making superstars out of accountants and analysts who may have once been considered pencil-pushers. That's because with new data analysis tools and reporting systems, more organizations are treating their finance teams as a strategic asset to realize growth, rather than an obligation. However, it's still easy to lose sight of how to reach that point, particularly because the most productive financial planning and analysis can only come from transactional work that is well done and affordable.

As Keith Button explained in an article for CFO.com, the work of FP&A professionals is becoming much more engaging and relevant to the success of the business compared to the past. With more access to financial data and the resources to extract value from it, FP&A staff members are now involved in strategic planning and execution at the highest level. Budgeting, forecasting, management reporting and risk management are just a few sectors where FP&A pros are taking over and disrupting the old guard, much to the pleasure of executives and shareholders.

However, Button and others point out that it would be unwise to assume the average corporate accountant can jump right into the FP&A world. In fact, the talent and technology available in most finance and billing departments might be precisely what needs to improve before any gains from high-level analysis can be realized. According to one FP&A consultant, Brian Kalish, who spoke to Button, perhaps 70 percent of the work involved in "forward-looking" roles like FP&A actually depends on the accountants and other staff members focused on the financial past.

FinanceFinance teams are more empowered than ever to embrace collaboration.

When analysts and strategists can't acquire data efficiently, can't verify it and can't reconcile it against comparable records, there's very little for them to accomplish. That opens up the potential for enormous competitive advantages in firms with the people and resources to align existing data with future performance targets.

"CFOs are [increasingly] able to see what's going on in their businesses and their world in real time, and make adjustments [quickly]," Kalish said. "If a CFO can see opportunities faster than others because of the tools he has, or see where problems are going to happen so he can [address them or] get out of the business faster, that's what it's all about."

Changing the FP&A equation

Although FP&A may be in vogue in corporate finance today, some would argue that even the most well-equipped team of analysts could still miss the point of the endeavor. A report from KPMG explained that one common problem seen in many corporate FP&A offices is essentially financial myopia – an overzealous attitude where meeting quarterly objectives rewards short-term gains at the cost of long-term growth and sustainability. Empowered by the advanced technology that has revolutionized their roles, KPMG argues that "finance" should be removed from the FP&A equation altogether and the field could instead be called "business planning and analysis." 

In this scenario, cash flow and revenue targets don't just get tossed in the trash, of course. Instead, these metrics are incorporated into a more holistic, practical view of how the business is doing and what to make of the data. Ideally, newly ordained BP&A teams will be more in tune with executives and board members as they discover solutions and highlight areas for improvement. It's an example of how collaboration between and across departments can result in the kind of transformational change that used to cost millions of dollars and untold years of work.

Once again, replacing that F with a B isn't really possible unless the people and processes in the back-office are there to support this transition. Consero provides businesses with each of these key ingredients so they can optimize accounting processes and develop a more centralized method for analysis and reporting. The end result of this effort is a company run like a well-oiled machine, and finance departments that can finally take advantage of all the superpowers at their disposal.