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The Benefits of Financial Planning & Analysis

Posted on:  August 31, 2022

Financial Planning & Analysis

What Is FP&A?

Financial Planning & Analysis (FP&A) is a set of planning and budgeting analytical activities that support an organization’s major business decisions. It connects a business’ plans, people, and data across all business functions.

More specifically, FP&A is a set of four activities that support a company’s financial health:
  1. Planning & Budgeting – provide a framework for financial objectives with a detailed roadmap to be carried out over specified amounts of time.
  2. Integrated Financial Planning – generates a comprehensive understanding of performance & profit drivers.
  3. Management & Performance Reporting – reports that analyze a project/department’s progress & inform stakeholders of its status.
  4. Forecasting & Modeling – process of building a prediction of how a company will perform in the future.

Why Use FP&A?

Financial Planning & Analysis is an integral part of any organization that helps leaders make decisions about the future, based on analysis of the data. Companies simply can’t make good decisions without information. FP&A allows executives and business leaders to have the best insights for the best decisions.

While Accounting departments looks at historical numbers, FP&A focuses on forecasts and future numbers. This method allows companies to leverage their data to reduce waste and grow profitability.

In today’s marketplace, there’s little room for error. Which makes it that much more important for every department within an organization to be looking at the same data from the same source and in the same way. This allows leadership, planning committees, and cross-functional teams to have a shared view of their KPIs (Key Performance Indicators), spending less time reconciling performance and more time minimizing risk and driving profitability.

The Future of FP&A: Digital Transformation

Successful business leaders have recognized the importance of taking a new approach to their finance data – one that triggers immediate action based on real-time information. It’s a shift from making decisions looking in a rearview mirror, to driving forward with clear data analytics.

Many companies today are enlisting an FP&A technology solution as it automatically enhances the finance department’s ability to manage performance by linking corporate strategy to performance. Modern financial planning & analysis solutions provide for:
  • Improved accuracy
  • Increased visibility & accountability
  • Single source of truth
  • Greater efficiency & automation
  • More flexibility, allowing for what-if analysis & ability to pivot in real-time
  • Faster results
  • Budgeting & forecasting to any depth
  • More time & available resources
  • Streamlined communication & enhanced collaboration
  • Deployment options

Research More Than Just Features

As you begin searching for the best solution for your team, it’s important to thoroughly research more than just the features/capabilities of any technology solution. While those are necessary points to consider, you should also research the following:

  1. How easy is the tool to use? Does it require IT dependence?
  2. What is the implementation timeframe from point of purchase to generating reports?
  3. What is the total cost of ownership? (Not just the software cost.)
  4. How experienced is their Services team?
  5. How quickly are you able to get needed Support?

Leading technology FP&A solutions, like Synoptix, give companies a competitive advantage and can be the difference-maker between success and failure.

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See how Synoptix's Business Intelligence can transform the way you view, plan & run your organization:

  • Empower your team with real-time visibility into all of your data for the best decisions.
  • Connect your people, plans & data across all business functions - including finance, sales, production & more.
  • Increase revenues & gain a competitive edge.
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