1st QUARTER 2014
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get overloaded with information but misses
critical items that would be pointed out in a
timely analysis.
Supporting repetitive FP&A tasks using
an efficient setup would alleviate this issue.
However, despite significant investments
into enterprise resource planning (ERP)
systems, their benefit for FP&A is gener-
ally limited. Much of the data needed for
the FP&A function comes from non-ERP
systems.
A great basis for much of the FP&A data
could be the consolidation tool that many
large organizations use to merge their
financials, such as Hyperion, Cognos, or
SAP BPC. While older implementations of a
consolidation tool generally focused on data
necessary for corporate reporting, recent
implementations include more functionality
(drill-down/commenting) and the capabil-
ity to add details, including non-financial
information.
Despite the diversity and complexity of the
organization, such consolidation tools will
easily solve most of the data requirements
for FP&A (think 80/20 rule) due to a higher
degree of automation. This would allow
FP&A staff to spend more time on analysis
and supporting the business.
The primary goal in setting up these sys-
tems is to focus on creating commonalities so
as to replicate them in the system, and cover
exceptions (e.g. specific business require-
ments) outside the system or with flexible
worksheets that link to data contained in the
system.
PROCESSES
M
any organizations combine FP&A and
accounting under the same manage-
ment. However, these functions are different
in nature, and although there is a link be-
tween them, their target audience and focus
is different. Accountants focus on accurately
closing the books and ensuring compli-
ance with tax and other regulations. FP&A
focuses on providing the business with
timely information to make good business
decisions.
Despite being separate functions, FP&A
can piggyback on accounting processes and
share the same systems. From a process
standpoint, FP&A does not need to wait until
the books are closed. Working in parallel will
result in quicker and more timely analysis.
The consistency mentioned above in set-
ting up systems is also key in the setting-up
processes: Piggybacking on each other’s work
requires a degree of alignment, though —
alignment in the data used in both operations
and corporate, and alignment between short-
and long-term projections.
By keeping it simple, focusing on the es-
sentials — content first, numbers second —
this entire process will reduce the time FP&A
folks spend on preparing reports.
Focusing on (creating) commonalities,
while still dealing with exceptions, sig-
nificantly reduces the complexity to some-
thing far simpler without losing important
elements, thus providing management
with timely and targeted analysis for their
decision-making. And is this not what FP&A
is all about?
C
DESPITE BEING SEPARATE FUNCTIONS, FP&A CAN PIGGYBACK ON
ACCOUNTING PROCESSES AND SHARE THE SAME SYSTEMS.
CENTRALIZED
SHARED SERVICES
DECENTRALIZED
Reporting
Reporting to external parties,
centralized functions
Repetitive reporting and analysis
Ad-hoc reporting
Analysis
Repetitive analysis (e.g. account
analysis)
Business-focused
analysis
Planning
Medium- and long-term
Short-term
FP&A Process
and System Setup, project management
Maintenance
Usage
Data Collection External (competition, market, etc.)
Internal (consolidation)
Transfer from operating systems to
FP&A systems
Data entry
Support
Strategic support
M&A support modeling
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