FP&A 101: Essential Activities Explained

The Financial Planning & Analysis domain consists of a number of varied activities revolving around strategic planning and financial analysis. Here are some key activities with detailed steps:-

Planning:

Budgeting: -Creating a numerical prediction of  future income, expenses, and cash flow based on historical data, market trends, and strategic plans.

Forecasting: Predicting future financial performance for different scenarios considering the actual year to date picture and updates on current market conditions.Scenario Planning: Performing simulation exercises to analyse various potential outcomes and their financial implications using different assumptions.

Analysis:

Financial Performance Analysis: Measuring and interpreting the financial performance against the plan and forecast and providing commentary on variances.Cost Analysis: Identifying and optimizing operational costs and other cost factors to improve efficiency of performance and profitability.Risk Management: Identifying, assessing, and mitigating potential financial risks to achieve organizational goals.

Reporting:

Management Reporting: Creating regular reports for senior management summarizing financial performance, trends, and insights to help them make informed business decisions.Ad-hoc Analysis: Providing customized financial analyses and insights to address specific questions or requests from various departments.Dashboard Reporting:Preparing and presenting interactive charts, graphs and other visual representations for better data representation.