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Introduction to FP&A Analyst Responsibilities
FP&A is a vital function for businesses of all sizes in India. However, the scope of work differs from company to company, depending on size & industry. The smaller the company, more generalized the function is ie. you get to involve yourself more closely with business decisions in multiple departments.
The role of individuals in FP&A extends well beyond basic budgeting, forecasting, and planning. As the central link between various teams, FP&A professionals are pivotal in business operations. Every business decision has a financial aspect that requires validation and approval by the Business Finance or FP&A teams, ensuring that all actions align with the company's financial strategies and goals.
Also Read: What is Internal Audit? Why does it matter?
Key FP&A Analyst Responsibilities include:
- Preparing financial reports & budgets,
- Analyzing financial and operational data to gather insights,
- Developing financial forecasts & plans,
- Providing financial advice to management & approving all major expenses (POs),
- Supporting business decision-making through prudent financial planning,
- Managing financial & business risks through stress testing all numbers.
For instance: A senior FP&A manager work responsibility may include chairing the company's capital expenditure approval committee. In plain language, the monthly/weekly session where you will review all capex proposals > INR 50k for approval.
Now, for each capital project you have to wear 5 different hats:
- Leader – Judgment on alignment of project to strategy, and review their financial case
- Driver – Ensuring resources in place to execute project and deliver the payback
- Operator – Ensuring the correct depreciation policy is applied by controllership/accounting teams
- Financier – Agreeing the plan for funding the project along with the rights & obligations.
- Custodian – Formal approval of the capex (and ensuring it can't be released without approval)
Reports and Reviews Handled by FP&A Analyst:
1. Planning & Budgeting:
- Annual Operating Plan (AOP): Comprehensive yearly planning.
- Quarterly Plans: Detailed planning conducted every quarter.
- Budgets: Prepared monthly or quarterly to manage spending.
- Headcount Planning: Forecasting staffing needs.
- Long Range Strategic Planning: Long-term strategy development.
2. Reporting & Analysis:
- Operational Reporting: Monitoring day-to-day operations.
- Financial Reporting: Tracking financial health and compliance.
- KPIs: Key Performance Indicators to measure success.
- Dashboards: Visual displays of data and trends.
- Variance Analysis: Comparing expected outcomes to actual results.
- PVM Analysis: Price Volume Mix analysis to understand sales dynamics.
- Drill-through/Roll-up/Drill-across Reports: Techniques for exploring data details and summaries.
3. Forecasting:
- Rolling Forecasts: Updating forecasts regularly to reflect new data.
- Trend Analysis: Analyzing patterns in data over time.
- Predictive Analytics: Using statistics and modeling to predict future trends.
4. Financial Modeling:
- What-If Analysis: Exploring hypothetical scenarios.
- Scenario Analysis: Assessing potential future events and their impacts.
If you're starting out your career, you will be actively preparing a lot of them, every week/month. If you're already an experienced professional, you will be actively reviewing a lot of them, for final submissions.
And once you're VP/CFO of the company (let's just say, the top brass), you will be directly taking decisions on the basis of these reports & submissions. The numbers driving these models will directly impact the way companies pivot in their lifecycle.
