Think of your FP&A team as the nucleus of your company

Ariel Menche

Oct 9, 2024

4 min read

Business executives discussing strategic finance

As a CEO, where are you getting your information from?

Who is providing you with your dashboards?

Who defines your KPIs (Key Performance Indicators)?

Who makes sure your data is correct?

Who generates your financial models?

Who reviews your data to make sure it’s aligned across business units?

In a vibrant, healthy, forward moving company, the answer to all of those questions should be the same: your FP&A team.

The short version

Your FP&A team should be the answer to who owns your dashboards, who defines your KPIs, who builds your financial models and who makes sure the data behind them is right.
Treat them as a service to the rest of the business. A good FP&A team works with the heads of marketing, sales and technology the way it would work with clients.
Their real job is consolidating your books, ERP, HR system and CRM into one set of reports the CEO and CFO can act on, so there is a single source of truth.
You can outsource FP&A, but not all of it. Outside help can build the function and review the process, with your own people running it daily.

We like to think of the Financial Planning and Analysis team as if it were the nucleus within a company. Less biologically, your FP&A team is a service within your company. They are the eyes and ears of the CEO and the CFO within the organization. A good FP&A team will treat each of your business leaders as their own clients within your company, including:

Head of Marketing
Head of Sales
Head of Tech
CTO
CIO

Your FP&A team is there to help those clients succeed from a financial and budgeting standpoint. They talk to the different business leaders within the organization to take pulse on how everyone is doing and where they're tracking with their own budgets.

More importantly, they’re able to consolidate all of that information into clear, intelligible reports for the CFO or even the CEO. Here at Raftel Strategy we like to talk about the importance of “a single source of truth” – and your FP&A team is ultimately responsible for compiling that truth from the disparate sources of data your organization generates.

Your FP&A team makes sure the quality of your data is accurate. That means it’s coming directly from your books and financial records, ERP system, HR system, and CRM system. They consolidate that data into a single report or financial model and ensure that it is consistent. (You would be surprised how many companies we see have inconsistent data depending on which data source.)

Of course, in that healthy company we described earlier, every single person on your team needs to care about good, clean, organized data. It’s not enough for the founder or CEO to care about it – everyone from your CFO to every employee in every department that records data needs to share that concern. And it’s your FP&A team that helps build that awareness and concern, reaching across departments to create a connective tissue of financial acumen and shared purpose that unites your organization and keeps it moving steadily towards profitability and growth.

Can you outsource your financial planning and analysis?

Of course you can, although it’s not ideal. BUT, and this is an important but, you shouldn’t outsource it all. We find that we are best able to help our clients when we work in partnership with them, strengthening their grasp of strategic financial planning, reviewing their processes for FP&A, adding clarity where necessary and insight where possible, and helping them set up their teams, but leave the ongoing management to our clients’ internal people.

Founders and CEOs can move mountains – when they are armed with good, clean, actionable data to understand where they are and plan for where they want to go. Your FP&A team is the source of that understanding. They are your trusted source for truth within your company.

Unfortunately, many finance teams still spend too much of their time reviewing invoices and receipts, chasing expense reports and managing budgets. They still don't spend enough time on strategic finance.

What is the situation at your company? Are you getting the data you need? Is your FP&A function operating at full power? We have built and repaired FP&A functions for 100+ clients in the US and Israel. Get in touch for a free consultation.

Summary

Your Financial Planning and Analysis team is the nucleus within your company.
FP&A team is there to help internal “clients” succeed from a financial and budgeting standpoint.
A good FP&A team connects your departments and helps keep your company moving in the right direction.
FP&A is responsible for creating intelligible reports and generating your “single source of truth” so you can make the right choices to move your company forward