The Advanced FP&A Guide provides finance professionals with actionable insights to improve financial planning and decision-making and boost business success.
As a CFO, you have a lot to handle managing budgets, planning finances, and always looking for ways to save money. Startup owners must understand FP&A to make smart decisions, manage cash flow, and avoid financial surprises. When you know FP&A well, you can set realistic financial goals and ensure your business strategy aligns with your vision.
“The challenge that a lot of non-financial segments have is they know what’s going on in their function, but they might not understand the data, the financial implications, and the financial strategy that ties into it. And that’s why FP&A is so valuable.”
―Carl Seidman, the founder of Weekly.
What is the role of FP&A Team?
The finance team will manage budgeting and forecasting to help you stay on track with your financial goals. They’ll analyze data to provide insights that support your important decisions. They also handle financial reporting and manage risk to keep your business compliant and ready for any challenges. Here are the finance team’s main roles:
- Budgeting and Forecasting: Budgeting and forecasting are all about creating plans that can adjust as things change. Using rolling forecasts, you can keep your business flexible and ensure that your strategic plans match up with what’s happening day-to-day. This way, your long-term goals stay connected to the reality on the ground, keeping your business moving in the right direction.
- Informed Choices: The finance team plays a crucial role in decision-making by advising you on boosting performance, lowering risks, and spotting new opportunities. They carefully analyze financial data to provide clear insights, ensuring you can make informed choices that benefit your business. This guidance is vital to keeping your company on the right track and ready to grow.
- Special Projects: The finance team handles special projects, such as M&A deals, improving processes, conducting market research, and deciding where to allocate capital. They ensure these projects go smoothly and align with your company’s goals. By managing these tasks, they help your business grow and run more efficiently.
- Skills and Competencies for FP&A Professionals: FP&A professionals need a strong finance and accounting background and sound data analysis skills. They should be able to communicate clearly and think strategically to help guide important business decisions. It’s also essential for them to know how to use modern financial tools and technology to automate tasks and make their work more efficient. These skills help them effectively support your business’s financial planning and analysis.
To learn more about what FP&A is, read this article.
Now that you know the roles and responsibilities of FP&A professionals let’s see how they support us in making decisions.
How Does FP&A Support Informed Decision-Making?
By analyzing your financial data and identifying trends, they give you insights that guide your strategic choices. With their support, you can be confident that your decisions are based on solid information, leading to better results for your business. Let’s look at some vital functions:
1. Strategic Scenario Modeling: When you’re planning your next big move, it’s essential to know how different decisions will affect your business. Strategic scenario modeling in FP&A lets you play out various “what-if” scenarios, giving you a clear picture of the possible outcomes.
Are errors like double accruals causing problems for your team? Bunker excels at error detection and prevention, ensuring these mistakes never happen again. Bunker keeps your financial data accurate and reliable, so small errors do not become bigger issues. Let Bunker help you keep your finances on track.
2. Connected Planning: It’s not enough to have a strong financial plan; you must ensure every department in your company is aligned. Connected planning links financial metrics with operational goals across all departments. This means that everyone is on the same page and working towards the same objectives, whether it’s sales, marketing, or operations.
Many businesses struggle to data-backed explain cost changes because decision-making lacks clarity and insights. Without detailed cost variations and explanations, it can be challenging to make informed financial decisions. Bunker provides the answers by offering clear, data-backed insights that make your financial story straightforward and reliable.
With Bunker, you gain the detailed understanding you need to confidently explain cost fluctuations and make smarter decisions.
3. Comprehensive Performance Reporting: Understanding your business’s real-time performance is essential for timely decisions. FP&A provides comprehensive performance reporting that goes beyond the basics. You get detailed, actionable insights into how different parts of your business are performing so you can spot trends, identify issues early, and make adjustments quickly.
FP&A can enable precise resource allocation by providing detailed insights into how resources are utilized across different regions, departments, and projects. Ongoing, FP&A can reallocate resources based on needs and priorities.
How can you ensure these informed decisions are made quickly and accurately? That’s where the importance of FP&A software comes in.
What is the Importance of FP&A Software?
FP&A software makes financial planning and analysis easier. It automates budgeting, forecasting, and data analysis, saving time and reducing mistakes. The software looks at lots of financial data, like transactions in your general ledger, and gives you real-time insights. These insights help you make smarter decisions, save money, and manage your financial strategies better. Some of the benefits are:
- Enhances accuracy and transparency: FP&A software improves accuracy and makes data more transparent. It gives you precise and reliable information to make quick and smart decisions, helping your business stay flexible and respond quickly to changes. For example, with Bunker’s advanced analytics, you gain even greater confidence in your financial data, ensuring every decision is backed by accurate, real-time insights.
- Automates and streamlines processes: It helps businesses quickly and easily understand their finances by automating tasks like data consolidation and financial reporting. Bunker analyzes large amounts of financial data, such as transactions in your general ledger, to provide clear insights that are often hard to find. These insights help you make better decisions, save money, and manage your financial strategies more effectively.
- Monitoring financial results: FP&A software helps you monitor your financial results, spot trends early, and reduce risks. It gives you real-time insights into your finances to make smart decisions and address issues before they become big problems. With Bunker’s advanced financial analysis tools, you can efficiently monitor vast amounts of data in minutes, with no risk and without time-consuming processes.
See how Bunker has reduced Kargo’s operating expenses with deeper financial visibility.
Now that you know the importance of FP&A software, how do you decide the best approach? Should you build an in-house FP&A team or rely on a tool like Bunker? Let’s explore the options.
How to Plan: Inhouse FP&A Team vs Bunker
When deciding between an in-house FP&A team and a tool like Bunker, it’s essential to consider how Bunker can streamline your financial processes. Bunker saves a lot of time by automating data analysis, allowing your financial analysts to focus on making informed decisions rather than just processing numbers.
- Cost: When you compare costs, an in-house FP&A team can be expensive in terms of salaries, benefits, training, and software. These costs add up as your business grows. Bunker offers a simpler, more affordable option with a predictable fee, helping you save money by reducing the need for a large team and lowering overhead.
- Efficiency and Turnout Time: An in-house FP&A team usually takes longer because of manual processes and the time it takes to analyze large amounts of data. Bunker automates these tasks, giving you faster results in much less time. While an in-house team might take days to finish an analysis, Bunker does it in minutes and reduces the risk of human error. This makes Bunker more efficient and helps your business make quicker, more reliable decisions.
- How to balance between both?: To balance both, use Bunker to reduce the risk of human error, and analyze a lot of financial data, like transactions in your general ledger, to provide insights that are usually hard to get. For deeper insights and expert decisions, rely on your FP&A professionals. This way, you stay agile, make better decisions, save money, and manage your financial strategies more effectively.
FP&A Processes and Best Practices
By following best practices like gathering and validating financial data, forecasting, and data analysis, you can make informed decisions, manage risks, and align your financial strategy with your goals. These processes help keep your business on track and ready for future challenges.
Variance analysis: Bunker facilitates analysing variances between budgeted amounts and actual expenses for detailed historicals. By offering General Ledger level insights, our product facilitates detailed variance analysis. You can quickly identify discrepancies, investigate the reasons behind them, and take corrective actions promptly, ensuring that your budget stays on track.
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For more details on FP&A processes and best practices, click here to read further.
Top Benefits of How Bunker Helps with FP&A
Bunker keeps your data secure in the cloud and easy to access wherever you are. It connects smoothly with your accounting systems, letting you explore transaction-level details from the general ledger without hassle. After each close, Bunker gives you a clear, concise monthly report so you can quickly see what matters and make smarter decisions. It’s all about saving you time and making financial management more straightforward.
“We deployed Bunker to deep-dive into our financial strategies, build our financial narrative, and feel more confident in preparation for fundraising.”
―Tiger Fang, the founder of Kargo
- Improved Decision-Making: Bunker encourages data-driven decision-making. Our General Ledger/transaction-level insights provide accurate, detailed financial data. This data empowers your decision-makers to make informed choices, identify inefficiencies, and prioritize initiatives that align with your organization’s goals, bringing you back to the fundamentals of Zero-Based Budgeting.
- Accurate Resource Allocation: Bunker enables precise resource allocation with detailed insights into how resources are utilized across different regions, departments, and projects. Having access to General ledger-level data ensures that resources are allocated where they are needed most, optimizing your budget allocation strategy. Reallocate resources based on needs and priorities on an ongoing basis.
- Enhanced Accountability: Bunker emphasizes accountability for budget owners. With General ledger-level insights, you can accurately attribute expenses to specific departments, projects, or cost centers. This attribution fosters accountability, as responsible parties can be clearly identified and held accountable for their budget utilization, promoting fiscal discipline within the organization.
Bunker makes managing finances easy by automating data analysis and reporting. With its intuitive dashboard and detailed monthly reports, you can easily track and analyze all your General Ledger data. With secure, cloud-based access to these insights, you can make quicker, smarter decisions. Bunker integrates smoothly with your accounting systems, saving you time and reducing errors so you can focus on growing your business.
Ready to elevate your business to new heights? Start your 14-day free trial today—no credit card required. Discover how Bunker can turn your financial data into strategic decisions and drive cost savings for your business.
