The advantages of a strong FP&A team are many. For starters, financial planning supports the overall business plan and puts a process in place to ensure objectives are achievable from a financial and resources point of view. Adequate planning and analysis drives an understanding of business projections and helps measure success.
And, if funding is needed, on-target FP&A makes it easier to present your financial case. Investors will require timely and accurate numbers as evidence of the strength of your business. Banks and lenders will ask to see this evidence too. With the right team in place and accurate financials ready to report, the funding process will be a much smoother task.
But maybe the most important role of the FP&A function — it picks up where accounting leaves off. While a controller considers and records historical results, the FP&A function is future-focused. It links long-range plans to annual operating and capital budgets and provides multi-year financial modelling and yearly target-setting processes. It integrates strategic targets with annual budgets. And it oversees the financial management function to ensure delivery of annual budget results and strengthen cash flow predictability.