December 5, 2023 • 19 mins
Financial Planning & Analysis provides one of the most critical and powerful functions in the business. Are you resourcing and employing your FP&A Team properly? You need to be continually planning the team’s functions and capabilities as technology changes and the business grows. The FP&A function cannot remain static. It must be growing and changing as conditions change. Your pathway to understanding the key metrics of the business AND if you are achieving your strategy, lies in the commitment to investing in your Financial Planning and Analysis team.
Episode outline:
- Is the business achieving the strategy,
- How FP&A can add huge value,
- Do they have the right tools,
- Invest in your FP&A team, and
- Where is FP&A going in the future?
Please connect with me on:
1. Instagram: stephen.mclain
2. Twitter: smclainiii
3. Facebook: stephenmclainconsultant
4. LinkedIn: stephenjmclainiii
For more resources, please visit Finance Leader Academy: financeleaderacademy.com.
- On the website, you can download the Become a Finance Leader Guide. You can use this guide to build your Finance Leadership skills so you can help senior leaders develop and execute the strategy.
- I also offer a course, Advance Your Finance and Accounting Career: Developing a Promotion Strategy that Sets You Apart.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Stephen McLain (00:00):
Hi, this is Stephen McLain of the Finance
Leader Podcast.
This is Bonus Episode no 70.
I hope you are having a greatday and another great week.
In last week's episode, episodeno 114, I discussed financial
agility and digitaltransformation.
I asked does your organizationhave the ability to overcome a
(00:22):
crisis or overcome rapidlychanging business and economic
conditions?
Is decision-making lagging dueto financial systems that cannot
adapt or because of legacyprocesses that don't support
change?
If you missed that episode,please go back and listen.
I believe financial agility anddigital transformation are big
(00:44):
topics for our fields.
I think it will help.
So this week I want to share anencore replay of Episode 91 on
financial planning and analysis.
The FPNA provides one of themost critical and powerful
functions in the business.
Are you resourcing andemploying your FPNA team
properly?
You need to be continuallyplanning the team's functions
(01:07):
and capabilities as technologychanges and the business grows.
The FPNA function cannot remainstatic and must be growing and
changing as conditions change.
Your pathway to understandingthe key metrics of the business
and if you are achieving yourstrategy lies in the commitment
to investing in your financialplanning and analysis team.
(01:30):
So here is the episode outline.
Number one is the businessachieving the strategy.
Number two how FPNA can addhuge value.
Number three do they have theright tools?
Number four invest in the FPNAteam.
And five where is FPNA going inthe future?
I will be doing more FPNAfocused episodes in the future
(01:53):
and I can't wait to share.
Also, please check out FinanceLeader Academy.
Please download the free Becomea Finance Leader Guide.
The link is in the show notesNow please enjoy this encore
episode, episode 91, financialPlanning and Analysis.
Now have a great rest of yourweek.
Don't forget to think about andstart planning on your 2024
(02:15):
goals, I am for sure.
Thank you for choosing theFinance Leader Podcast.
Until next time.
Thank you for listening.
Take care.
Financial planning and analysisprovides one of the most
critical and powerful functionsin the business.
(02:36):
Are you resourcing andemploying your FPNA team
properly?
You need to be continuallyplanning the team's functions
and capability as technologychanges and the business grows.
The FPNA function cannot remainstatic.
It must be growing and changingas conditions change.
(02:57):
Your pathway to understandingthe key metrics of the business
and if you are achieving yourstrategy lies in the commitment
to investing in your financialplanning and analysis team.
Please enjoy the episode.
Welcome to the Finance LeaderPodcast, where leadership is
bigger than the numbers.
I am your host, stephen McLean.
(03:17):
This is the podcast fordeveloping leaders in finance
and accounting.
Please consider following me onTwitter, facebook, instagram
and LinkedIn.
My usernames and the links arein this episode's show notes.
And also please join theFacebook group I have for this
podcast community.
Thank you.
This episode number 91, and Iwill be talking about the
(03:40):
importance of the financialplanning and analysis team, and
I will highlight the followingtopics Number 1 is the business
achieving the strategy?
Number 2, how FPNA can add hugevalue.
Number 3, do they have theright tools?
Number 4, invest in your FPNAteam.
And 5, where is FPNA going inthe future?
(04:01):
Economist, author and professorat Imperial College Business
School, jonathan Haskell, saidI'll often joke that when people
ask what is business analysis,I say you know all those times
that people say somebody shouldlook into that.
Well, I'm the person that looksinto that.
Welcome to season 11 of thepodcast.
(04:22):
I am so glad to be back fromthe break.
Season 11 is going to beamazing.
Today's episode is aboutfinancial planning and analysis.
I'm also going to talk aboutdata validation and also the
future of artificialintelligence and finance, and
another episode will be aboutproblem solving and decision
making, along with leadingduring the annual budget
(04:43):
development process.
Again, I'm very happy to beback and sharing episodes that
can help you become a leader notjust someone who works numbers
on a spreadsheet, but someonewho can have a positive impact
in your organization every dayand in every task you do.
I want this podcast always tohelp you build your leadership
ability.
It is meant to provoke you toevaluate yourself, your
(05:07):
abilities, your mindset and manymore other aspects of yourself,
your career and your life.
In this first episode for season11, I am talking about the
importance of financial planningand analysis and how this team
helps the business achieve itsstrategy and helps to develop
key insights about the metricsof the business so that better
(05:29):
decisions can be made.
And this is assuming the FPNAteam is properly resourced and
staffed.
We will talk about this more indetail later.
Financial planning and analysisis a function and a team that
requires a lot of attention fromthe CFO and even the CEO.
This is where you need toinvest your time and commit the
right resources so they providethe best possible knowledge and
(05:52):
usable information for thedecision making and the
formulation and execution oforganizational strategy.
The four major roles of theFPNA team are analysis, planning
, reporting and forecasting.
The FPNA team evaluates theperformance of the company's
product and service portfolio todetermine gross margin and
(06:15):
other key metrics.
They also examine investmentprojects and key expenses that
affect profitability.
Additionally, the FPNA teamplays a major role in planning
the organization's budget andevaluating the current year's
execution of the budget, plusmany more other tasks focused on
growing the business and addingvalue to a multitude of
(06:37):
stakeholders.
To develop and execute astrategy and to guide the
company, the executive team andother senior leaders need
relevant data and insights tomake timely decisions.
It is also helpful that theyknow what they want, but
sometimes they don't.
Not until you show them thereal data, actually validated
data and realistic projectionsand analysis, along with the
(07:00):
story behind the numbers, willthey truly understand their
impact.
This is where a leadership,focused and forward thinking
FPNA team can help guide anddeliver information that can
make a positive difference.
Keeping in mind that thebusiness strategy is how you
commit resources and how thebusiness is structured and how
(07:21):
the company will be positioned,executives must make decisions
and communicate where they wantthe organization to go when
senior leaders in the FPNA teamcan properly partner and trust
each other, we will see thepotential for the organization
be truly fulfilled and almostunlimited journey of strategy
execution.
However, this is often an areathat needs improvement.
(07:43):
I would like for everyone whoworks in FPNA to embrace the
leadership aspect of the role.
You get to lead with thenumbers.
If done properly, you canpartner with those leaders who
own the deliverance of themetrics you analyze so you help
them with additional insights.
The ability to thinkstrategically is to find key
(08:03):
business insights, and the FPNAteam can do that.
Your analysts should becomeexperts within their portfolio
and then partner with thestakeholders.
This will help build trust andbetter cooperation.
The typical financial analystwastes a lot of time pulling raw
data and formatting, alsocutting and pasting that very
(08:24):
same data.
This is a huge waste of effortbecause the tools and processes
they are using are probablyoutdated.
We need systems and processesthat support more real-time
access to data that is alreadyformatted and ready to be
analyzed.
There will always be the needto export some data to a
spreadsheet and do some analysis, but I don't want analysts
(08:46):
spending the majority of theirtime doing that.
I want more of their time to bevalue-added and focused on
delivering data ready fordecision-making or evaluation.
How much time do your analystsspend on formatting or cutting
and pasting instead of analyzingand leading discussions on how
that data can change the company?
What do I want organizations todo differently with their FPNA
(09:09):
team?
I want them to literallyrelease them, to act, to empower
them, to use their leadership,to dig into the numbers and to
partner with senior leaders tofurther understand what is
happening with key metrics andperformance indicators.
If your team is doing the sameanalysis every week and every
month, then what true value arethey providing?
Are you still doing monthlyclose?
(09:31):
The same, with the same slidesevery month?
Do the slides even tell a story?
Do you know what is reallyhappening on every monthly
closed slide, you see, and howit impacts the business?
Most monthly closedpresentations fail to deliver
because they present the sameold, tired data.
My most intriguing andinteresting work assignments
(09:51):
were when I was working on afinancial planning and analysis
team.
This is where metrics andanalysis meet, decisions and
then strategy.
This is where you can make ahuge impact on how the strategy
is developed and executed.
Financial analysts mustexercise leadership to ensure
change occurs based on theirfindings, using new and
(10:12):
innovative ways to look at theirnumbers.
Now let's talk about theimportance of the financial
planning and analysis team.
Number one is the businessachieving the strategy.
Strategy comes down to thechoices you make about the
resources you have and how youuse them and align them to the
market position you will take.
Does your organization have arealistic and achievable
(10:34):
strategy?
Does it have a strategy thateveryone can understand and
actions must be prioritized.
How are you evaluating yourstrategy execution?
Your FPNA team should beworking and assisting to
evaluate if the strategy isbeing executed properly, and
this can be done by analyzingkey metrics and how well the
product and service lines areperforming to the target market
(10:56):
position.
Number two how FPNA can addhuge value.
The key to knowing insights tothe business is to break down
the key metrics.
But what are those metrics andhow do you break them down?
To make sense, you need to knowwhat components make up each of
the metrics you are responsiblefor.
How and why do they change invalue?
(11:17):
What are the variables?
That moves them each month?
Now let's say shipping expenseis a key metric for your
business.
What components of this expensedo you need to know to help
find an insight?
Maybe shipping options for lateproducts that are going to be
late to the customer.
This can be revealing, becausewhy are we so late on product
delivery?
Is it material to the businessand how can we improve Further?
(11:41):
Are we losing business becausewe are late on delivery?
There are so many areas to deepdive other than just knowing
how much shipping expenses wereeach month To better understand.
This is why I ask FPNA analyststo partner with the metric
owners.
Try to find out everything thatcan affect the metric.
You may find savings or how todo it better.
(12:01):
How do you link your key metricsto strategy formulation and
execution?
Fpna is in a unique place wherethey can determine which
metrics and which lines in theprofit and loss statement that
directly affect strategyexecution.
What moves the strategy, whichproducts and services move the
strategy in the right directionand which expenses affect the
strategy the most?
(12:22):
How can FPNA positively affectthis?
What can you do to look further?
Are the processes right?
Are you putting together theright information to help
decision makers?
Number three do they have theright tools?
To help the FPNA team besuccessful, they need to be
resourced properly and have theright tools Plus have the right
(12:43):
vision for what they shoulddeliver to the company.
By tools, I mean the financesystems they are using.
What analytics applications dothey have?
Does it include consulting onhow to build out the right
analytical tests?
And what financial models inthe framework does the team use
for projections and analysis?
Are these tools from 10 or 20years ago or have they been
(13:04):
refreshed recently?
As a consultant, I have cleanedup and refreshed many Excel
files that were still being usedmany years after they were
first built, but now had errorsin them after being passed
around and sure they still work.
You will be surprised by whatyou will find in old Excel
models.
And what tasks is the teamdoing?
(13:25):
What are they spending theirtime doing?
If your FPNA team is spendinglarge amounts of time
downloading and formatting dataor just cutting and pasting,
they are not being used wisely.
Number four invest in your FPNAteam.
Your FPNA team can delivergreat value when resourced
properly, which also includeshaving bold and caring
(13:45):
leadership in place.
We talked about the right toolsa few minutes ago.
Your FPNA team members alsoneed time and funds for training
and development.
What is your company's plan toresource the FPNA team so they
can properly assist theexecutive team in guiding the
company.
Consider hiring the rightleadership with the right
mindset.
Ensure you also hire analystswho are right, fit and not just
(14:10):
for hard technical skills, butalso key soft skills.
Ensure the team has the timeand resources to train and
develop.
Invest in them.
It will give back huge returns.
Number five where is FPNA goingin the future?
The FPNA team of the futurewill involve some amazing
features and abilities.
It will be determined by howreal time and accurate your data
(14:33):
will be and how well yoursystems can predict what will
happen next.
We will see more use ofartificial intelligence to
calculate projections, to runantelinical testing and
streamlined real timeinformation for decision makers.
We will see more use of cloudbased applications with real
time data and our datawarehouses will also be cloud
(14:56):
based.
All of this means we are notgonna wait hours or days for
analysis anymore.
We need usable information atour fingertips right now or
close to now.
We need to run models andprojections more quickly using
real time data.
The gap will be closing betweenwhen the data is available to
when usable and relevantinformation will be used by
(15:18):
decision makers.
Be ready to invest in your FPNAteam to close that gap.
When resourced and utilizedproperly.
The FPNA team can addtremendous value to decision
making and evaluating what ishappening in the business.
When working or consulting witha new team, I like to examine
what is being analyzed andreported today and how long they
(15:41):
have focused on this, and doesit still make sense now?
What might be missing?
What other metrics should beanalyzed?
Even senior leaders can getstuck looking at the same
reports weekly and monthly, thatthey may miss or not understand
what really should be analyzed.
So shake things up occasionally.
Look at what you are presentingand does it still make sense
(16:03):
For action today?
If you are in leadership, isyour financial planning and
analysis team being utilizedproperly?
Are they resourced properly anddo they have a long term plan
for making them better accordingto your market, your strategy,
the economy and currentlyavailable in emerging technology
?
If you are an analyst, thereare a few areas you can start
(16:25):
improving today.
How much do you really knowabout your portfolio?
Do you really know the metricsand other areas you are
responsible for analyzing, orare you just pulling the same
data all the time without anytrue added value?
What are you doing to make adifference, to help the company
to grow and in the execution ofthe strategy.
(16:45):
Don't forget to grab my freeguide for you, called the
Leadership Growth Blueprint forFinance and Accounting Managers.
Are you a finance or accountingprofessional who is also
leading people, but havequestions about how to lead more
effectively?
I know you are expected to bethe technical expert in our
field.
Learning leadership can set youapart from your peers, which
(17:06):
can then lead you to moreopportunities.
In the free guide, I talk aboutthree leadership areas
communication, team developmentand empowerment, plus a few
recommendations aroundchallenges with the financial
systems you are using tocomplete your work.
The link to this free guide isin the post or the bio.
You can also go tofinanceleaderacademycom to
(17:28):
download it.
Please use the guide to helpyou with a few leadership wins
today.
Thank you.
Today I talked about theimportance of the financial
planning and analysis team and Ihighlighted the following
points.
Number one is the businessachieving the strategy?
Number two how FPNA can addhuge value.
Number three do they have theright tools?
(17:49):
Number four invest in your FPNAteam.
And five where is FPNA going inthe future?
The FPNA team can be a powerfulforce in the organization if
resourced properly and if theyare empowered to act and take
action by partnering with seniorleaders on finding relevant
insights.
A careless senior leader canjust as easily deny what FPNA
(18:13):
can deliver by being pessimisticand unbelieving in data, but
also believing in gut decisionsonly, or upset when the data
suggests something that isthreatening to their own kingdom
in the company.
And yes, this happens.
Believe in and invest in yourFPNA team so they can deliver
incredible value.
I would expect CFOs and CEOs toinvest their time in this team
(18:38):
so they have the right tools todo their jobs properly.
Next week, I will be talkingabout data.
I hope you enjoyed the FinanceLeader podcast.
I am dedicated to helping yougrow your leadership skills, to
change your mindset and toclarify your goals so you
advance your career.
You can find this episodewherever you listen to podcasts.
If this episode helped youtoday, please share and leave a
(19:01):
quick review so that others mayfind the podcast Until next time
.
You can check out moreresources at
financeleaderacademycom and signup for my weekly updates so you
don't miss an episode of thepodcast.
And now go lead your team andI'll see you next time.
Thank you.
Hi, this is Stephen McLain of the Finance
Leader Podcast.
This is Bonus Episode no 70.
I hope you are having a greatday and another great week.
In last week's episode, episodeno 114, I discussed financial
agility and digitaltransformation.
I asked does your organizationhave the ability to overcome a
(00:22):
crisis or overcome rapidlychanging business and economic
conditions?
Is decision-making lagging dueto financial systems that cannot
adapt or because of legacyprocesses that don't support
change?
If you missed that episode,please go back and listen.
I believe financial agility anddigital transformation are big
(00:44):
topics for our fields.
I think it will help.
So this week I want to share anencore replay of Episode 91 on
financial planning and analysis.
The FPNA provides one of themost critical and powerful
functions in the business.
Are you resourcing andemploying your FPNA team
properly?
You need to be continuallyplanning the team's functions
(01:07):
and capabilities as technologychanges and the business grows.
The FPNA function cannot remainstatic and must be growing and
changing as conditions change.
Your pathway to understandingthe key metrics of the business
and if you are achieving yourstrategy lies in the commitment
to investing in your financialplanning and analysis team.
(01:30):
So here is the episode outline.
Number one is the businessachieving the strategy.
Number two how FPNA can addhuge value.
Number three do they have theright tools?
Number four invest in the FPNAteam.
And five where is FPNA going inthe future?
I will be doing more FPNAfocused episodes in the future
(01:53):
and I can't wait to share.
Also, please check out FinanceLeader Academy.
Please download the free Becomea Finance Leader Guide.
The link is in the show notesNow please enjoy this encore
episode, episode 91, financialPlanning and Analysis.
Now have a great rest of yourweek.
Don't forget to think about andstart planning on your 2024
(02:15):
goals, I am for sure.
Thank you for choosing theFinance Leader Podcast.
Until next time.
Thank you for listening.
Take care.
Financial planning and analysisprovides one of the most
critical and powerful functionsin the business.
(02:36):
Are you resourcing andemploying your FPNA team
properly?
You need to be continuallyplanning the team's functions
and capability as technologychanges and the business grows.
The FPNA function cannot remainstatic.
It must be growing and changingas conditions change.
(02:57):
Your pathway to understandingthe key metrics of the business
and if you are achieving yourstrategy lies in the commitment
to investing in your financialplanning and analysis team.
Please enjoy the episode.
Welcome to the Finance LeaderPodcast, where leadership is
bigger than the numbers.
I am your host, stephen McLean.
(03:17):
This is the podcast fordeveloping leaders in finance
and accounting.
Please consider following me onTwitter, facebook, instagram
and LinkedIn.
My usernames and the links arein this episode's show notes.
And also please join theFacebook group I have for this
podcast community.
Thank you.
This episode number 91, and Iwill be talking about the
(03:40):
importance of the financialplanning and analysis team, and
I will highlight the followingtopics Number 1 is the business
achieving the strategy?
Number 2, how FPNA can add hugevalue.
Number 3, do they have theright tools?
Number 4, invest in your FPNAteam.
And 5, where is FPNA going inthe future?
(04:01):
Economist, author and professorat Imperial College Business
School, jonathan Haskell, saidI'll often joke that when people
ask what is business analysis,I say you know all those times
that people say somebody shouldlook into that.
Well, I'm the person that looksinto that.
Welcome to season 11 of thepodcast.
(04:22):
I am so glad to be back fromthe break.
Season 11 is going to beamazing.
Today's episode is aboutfinancial planning and analysis.
I'm also going to talk aboutdata validation and also the
future of artificialintelligence and finance, and
another episode will be aboutproblem solving and decision
making, along with leadingduring the annual budget
(04:43):
development process.
Again, I'm very happy to beback and sharing episodes that
can help you become a leader notjust someone who works numbers
on a spreadsheet, but someonewho can have a positive impact
in your organization every dayand in every task you do.
I want this podcast always tohelp you build your leadership
ability.
It is meant to provoke you toevaluate yourself, your
(05:07):
abilities, your mindset and manymore other aspects of yourself,
your career and your life.
In this first episode for season11, I am talking about the
importance of financial planningand analysis and how this team
helps the business achieve itsstrategy and helps to develop
key insights about the metricsof the business so that better
(05:29):
decisions can be made.
And this is assuming the FPNAteam is properly resourced and
staffed.
We will talk about this more indetail later.
Financial planning and analysisis a function and a team that
requires a lot of attention fromthe CFO and even the CEO.
This is where you need toinvest your time and commit the
right resources so they providethe best possible knowledge and
(05:52):
usable information for thedecision making and the
formulation and execution oforganizational strategy.
The four major roles of theFPNA team are analysis, planning
, reporting and forecasting.
The FPNA team evaluates theperformance of the company's
product and service portfolio todetermine gross margin and
(06:15):
other key metrics.
They also examine investmentprojects and key expenses that
affect profitability.
Additionally, the FPNA teamplays a major role in planning
the organization's budget andevaluating the current year's
execution of the budget, plusmany more other tasks focused on
growing the business and addingvalue to a multitude of
(06:37):
stakeholders.
To develop and execute astrategy and to guide the
company, the executive team andother senior leaders need
relevant data and insights tomake timely decisions.
It is also helpful that theyknow what they want, but
sometimes they don't.
Not until you show them thereal data, actually validated
data and realistic projectionsand analysis, along with the
(07:00):
story behind the numbers, willthey truly understand their
impact.
This is where a leadership,focused and forward thinking
FPNA team can help guide anddeliver information that can
make a positive difference.
Keeping in mind that thebusiness strategy is how you
commit resources and how thebusiness is structured and how
(07:21):
the company will be positioned,executives must make decisions
and communicate where they wantthe organization to go when
senior leaders in the FPNA teamcan properly partner and trust
each other, we will see thepotential for the organization
be truly fulfilled and almostunlimited journey of strategy
execution.
However, this is often an areathat needs improvement.
(07:43):
I would like for everyone whoworks in FPNA to embrace the
leadership aspect of the role.
You get to lead with thenumbers.
If done properly, you canpartner with those leaders who
own the deliverance of themetrics you analyze so you help
them with additional insights.
The ability to thinkstrategically is to find key
(08:03):
business insights, and the FPNAteam can do that.
Your analysts should becomeexperts within their portfolio
and then partner with thestakeholders.
This will help build trust andbetter cooperation.
The typical financial analystwastes a lot of time pulling raw
data and formatting, alsocutting and pasting that very
(08:24):
same data.
This is a huge waste of effortbecause the tools and processes
they are using are probablyoutdated.
We need systems and processesthat support more real-time
access to data that is alreadyformatted and ready to be
analyzed.
There will always be the needto export some data to a
spreadsheet and do some analysis, but I don't want analysts
(08:46):
spending the majority of theirtime doing that.
I want more of their time to bevalue-added and focused on
delivering data ready fordecision-making or evaluation.
How much time do your analystsspend on formatting or cutting
and pasting instead of analyzingand leading discussions on how
that data can change the company?
What do I want organizations todo differently with their FPNA
(09:09):
team?
I want them to literallyrelease them, to act, to empower
them, to use their leadership,to dig into the numbers and to
partner with senior leaders tofurther understand what is
happening with key metrics andperformance indicators.
If your team is doing the sameanalysis every week and every
month, then what true value arethey providing?
Are you still doing monthlyclose?
(09:31):
The same, with the same slidesevery month?
Do the slides even tell a story?
Do you know what is reallyhappening on every monthly
closed slide, you see, and howit impacts the business?
Most monthly closedpresentations fail to deliver
because they present the sameold, tired data.
My most intriguing andinteresting work assignments
(09:51):
were when I was working on afinancial planning and analysis
team.
This is where metrics andanalysis meet, decisions and
then strategy.
This is where you can make ahuge impact on how the strategy
is developed and executed.
Financial analysts mustexercise leadership to ensure
change occurs based on theirfindings, using new and
(10:12):
innovative ways to look at theirnumbers.
Now let's talk about theimportance of the financial
planning and analysis team.
Number one is the businessachieving the strategy.
Strategy comes down to thechoices you make about the
resources you have and how youuse them and align them to the
market position you will take.
Does your organization have arealistic and achievable
(10:34):
strategy?
Does it have a strategy thateveryone can understand and
actions must be prioritized.
How are you evaluating yourstrategy execution?
Your FPNA team should beworking and assisting to
evaluate if the strategy isbeing executed properly, and
this can be done by analyzingkey metrics and how well the
product and service lines areperforming to the target market
(10:56):
position.
Number two how FPNA can addhuge value.
The key to knowing insights tothe business is to break down
the key metrics.
But what are those metrics andhow do you break them down?
To make sense, you need to knowwhat components make up each of
the metrics you are responsiblefor.
How and why do they change invalue?
(11:17):
What are the variables?
That moves them each month?
Now let's say shipping expenseis a key metric for your
business.
What components of this expensedo you need to know to help
find an insight?
Maybe shipping options for lateproducts that are going to be
late to the customer.
This can be revealing, becausewhy are we so late on product
delivery?
Is it material to the businessand how can we improve Further?
(11:41):
Are we losing business becausewe are late on delivery?
There are so many areas to deepdive other than just knowing
how much shipping expenses wereeach month To better understand.
This is why I ask FPNA analyststo partner with the metric
owners.
Try to find out everything thatcan affect the metric.
You may find savings or how todo it better.
(12:01):
How do you link your key metricsto strategy formulation and
execution?
Fpna is in a unique place wherethey can determine which
metrics and which lines in theprofit and loss statement that
directly affect strategyexecution.
What moves the strategy, whichproducts and services move the
strategy in the right directionand which expenses affect the
strategy the most?
(12:22):
How can FPNA positively affectthis?
What can you do to look further?
Are the processes right?
Are you putting together theright information to help
decision makers?
Number three do they have theright tools?
To help the FPNA team besuccessful, they need to be
resourced properly and have theright tools Plus have the right
(12:43):
vision for what they shoulddeliver to the company.
By tools, I mean the financesystems they are using.
What analytics applications dothey have?
Does it include consulting onhow to build out the right
analytical tests?
And what financial models inthe framework does the team use
for projections and analysis?
Are these tools from 10 or 20years ago or have they been
(13:04):
refreshed recently?
As a consultant, I have cleanedup and refreshed many Excel
files that were still being usedmany years after they were
first built, but now had errorsin them after being passed
around and sure they still work.
You will be surprised by whatyou will find in old Excel
models.
And what tasks is the teamdoing?
(13:25):
What are they spending theirtime doing?
If your FPNA team is spendinglarge amounts of time
downloading and formatting dataor just cutting and pasting,
they are not being used wisely.
Number four invest in your FPNAteam.
Your FPNA team can delivergreat value when resourced
properly, which also includeshaving bold and caring
(13:45):
leadership in place.
We talked about the right toolsa few minutes ago.
Your FPNA team members alsoneed time and funds for training
and development.
What is your company's plan toresource the FPNA team so they
can properly assist theexecutive team in guiding the
company.
Consider hiring the rightleadership with the right
mindset.
Ensure you also hire analystswho are right, fit and not just
(14:10):
for hard technical skills, butalso key soft skills.
Ensure the team has the timeand resources to train and
develop.
Invest in them.
It will give back huge returns.
Number five where is FPNA goingin the future?
The FPNA team of the futurewill involve some amazing
features and abilities.
It will be determined by howreal time and accurate your data
(14:33):
will be and how well yoursystems can predict what will
happen next.
We will see more use ofartificial intelligence to
calculate projections, to runantelinical testing and
streamlined real timeinformation for decision makers.
We will see more use of cloudbased applications with real
time data and our datawarehouses will also be cloud
(14:56):
based.
All of this means we are notgonna wait hours or days for
analysis anymore.
We need usable information atour fingertips right now or
close to now.
We need to run models andprojections more quickly using
real time data.
The gap will be closing betweenwhen the data is available to
when usable and relevantinformation will be used by
(15:18):
decision makers.
Be ready to invest in your FPNAteam to close that gap.
When resourced and utilizedproperly.
The FPNA team can addtremendous value to decision
making and evaluating what ishappening in the business.
When working or consulting witha new team, I like to examine
what is being analyzed andreported today and how long they
(15:41):
have focused on this, and doesit still make sense now?
What might be missing?
What other metrics should beanalyzed?
Even senior leaders can getstuck looking at the same
reports weekly and monthly, thatthey may miss or not understand
what really should be analyzed.
So shake things up occasionally.
Look at what you are presentingand does it still make sense
(16:03):
For action today?
If you are in leadership, isyour financial planning and
analysis team being utilizedproperly?
Are they resourced properly anddo they have a long term plan
for making them better accordingto your market, your strategy,
the economy and currentlyavailable in emerging technology
?
If you are an analyst, thereare a few areas you can start
(16:25):
improving today.
How much do you really knowabout your portfolio?
Do you really know the metricsand other areas you are
responsible for analyzing, orare you just pulling the same
data all the time without anytrue added value?
What are you doing to make adifference, to help the company
to grow and in the execution ofthe strategy.
(16:45):
Don't forget to grab my freeguide for you, called the
Leadership Growth Blueprint forFinance and Accounting Managers.
Are you a finance or accountingprofessional who is also
leading people, but havequestions about how to lead more
effectively?
I know you are expected to bethe technical expert in our
field.
Learning leadership can set youapart from your peers, which
(17:06):
can then lead you to moreopportunities.
In the free guide, I talk aboutthree leadership areas
communication, team developmentand empowerment, plus a few
recommendations aroundchallenges with the financial
systems you are using tocomplete your work.
The link to this free guide isin the post or the bio.
You can also go tofinanceleaderacademycom to
(17:28):
download it.
Please use the guide to helpyou with a few leadership wins
today.
Thank you.
Today I talked about theimportance of the financial
planning and analysis team and Ihighlighted the following
points.
Number one is the businessachieving the strategy?
Number two how FPNA can addhuge value.
Number three do they have theright tools?
(17:49):
Number four invest in your FPNAteam.
And five where is FPNA going inthe future?
The FPNA team can be a powerfulforce in the organization if
resourced properly and if theyare empowered to act and take
action by partnering with seniorleaders on finding relevant
insights.
A careless senior leader canjust as easily deny what FPNA
(18:13):
can deliver by being pessimisticand unbelieving in data, but
also believing in gut decisionsonly, or upset when the data
suggests something that isthreatening to their own kingdom
in the company.
And yes, this happens.
Believe in and invest in yourFPNA team so they can deliver
incredible value.
I would expect CFOs and CEOs toinvest their time in this team
(18:38):
so they have the right tools todo their jobs properly.
Next week, I will be talkingabout data.
I hope you enjoyed the FinanceLeader podcast.
I am dedicated to helping yougrow your leadership skills, to
change your mindset and toclarify your goals so you
advance your career.
You can find this episodewherever you listen to podcasts.
If this episode helped youtoday, please share and leave a
(19:01):
quick review so that others mayfind the podcast Until next time
.
You can check out moreresources at
financeleaderacademycom and signup for my weekly updates so you
don't miss an episode of thepodcast.
And now go lead your team andI'll see you next time.
Thank you.
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