| FP&A tasks and activities |
Financial planning and analysis (FP&A), in accounting and business, refers to the various integratedplanning,analysis, andmodeling activities aimedat supportingfinancial decisioning and managementin the wider organization.[1][2][3][4][5]SeeFinancial analyst § Financial planning and analysis for outline, and aside articles for further detail. In larger companies, "FP&A" will run as a dedicated area or team, under an "FP&A Manager" reporting to theCFO.[6]
FP&A is distinct fromfinancial management and (management)accounting in that it is oriented, additionally, towardsbusiness performance management, and, further, encompasses bothqualitative andquantitative analysis. This positioning allows management—in partnership with FP&A—to preemptively address issues relating, e.g., tocustomers andoperations, as well as themore traditional business-finance problems.Relatedly, althoughBudgeting andForecasting are typically done at specific times in the year—and correspondingly cover specific time periods—FP&A, by contrast, has a wider brief re both horizon and content. "FP&A Analysts" thus play an important role in every (major) decision by the company—ranging in scope from changes in headcount tomergers and acquisitions.[1]
Over the years, FP&A's role has evolved, facilitated by technological advances.[4]During its early years, 1960s to 1980s, FP&A focused on more traditional forecasting andfinancial analysis; relying onspreadsheets, mainlyExcel, but in earlier years,Lotus 1-2-3 (andVisiCalc). From the 1980s to the early 2000s, the scope shifted torisk,scenario, andsensitivity analysis; utilizingbusiness intelligence andfinancial modelingsoftware, such asCognos,Hyperion, andBusinessObjects. From 2000s to present, the emphasis is increasingly onpredictive analytics; tools includecloud-based platforms andanalytics packages, i.e.Amazon Web Services andMicrosoft Azure, andSAS,KNIME,[7]R, andPython.[8]More recently,specialized software — which increasingly[9] employsAI /ML — is availablecommercially. Products here are fromJedox,Anaplan,Workday,Hyperion,Wolters Kluwer,Datarails,Workiva and others.