Financial planning & analysis (FP&A) drives strategic business decisions across the organization through integrated planning and forecasting, performance management and financial analysis.

FP&A is the art of the possible. It is the field of finance that speaks to those who are naturally curious, like to explore data and have an appetite for continuous learning.

To be an FP&A professional is to be an interpreter, a storyteller and a relationship-builder. “FP&A is the only area I know that allows me to be curious, to learn, teach, influence, observe and directly see the effects on a single enterprise,” said Ken Fick, industry veteran.

How Does FP&A Differ from Accounting?

Allocating Working Capital

FP&A is future-focused. These professionals improve business decisions across the organization by supporting the allocation of capital to its most productive use. Their work centers on answering the critical question: Where should the next dollar go? They are partners to the business, providing leadership with financial and operational metrics, and creating visualizations, dashboards and scorecards to inform others in ways that speak to them and their needs.

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Accounting is focused on the past. They record the transactions, report the information to management and stakeholders, and ensure compliance in their reporting through a standardized set of rules. 

Working in Probabilities

FP&A are big-picture thinkers. They understand that decisions need to be made in changing markets, and data is rarely complete or perfect. These professionals take the little details and ask themselves how this will affect the entire enterprise, and how it could potentially be the beginning of a new trend or business change. “It’s a disruptive arena that creates a lot of value,” said Hector Rubalcava, FPAC, Director of FP&A for Press Ganey. 

Accounting is all about accuracy and precision. They remove all context from the little things, and any small variations that don’t meet their materiality thresholds are dismissed. 

Relationship Building

FP&A is dependent on the relationships they build with other business units. Through these relationships, they gain a better understanding of the intricacies of the unit, which allows them to analyze operations and make decisions more effectively. They do this by peeling back the layers to figure out the why, which in turn leads to a more advanced answer to: now what?  

Accounting sticks with accounting; their interactions with other business units are minimal. Further, they are focused on the what — here is the income statement and balance sheet, and here is what happened. 

What Skills are Needed to Make the Transition from Accounting to FP&A?

Accounting provides a great foundation for any career in finance. You bring detailed knowledge of the company’s financial systems. You have the inside track on how and where to dig into the details, and you understand the nuances in the data. Accountants know the numbers; they understand what’s inside the books and how to interpret it.

As you move into FP&A, there are some skills you will need to learn including how to develop business partnerships and analytical skills. You will need to know the business (e.g., KPIs and metrics) and form a solid understanding of the market and economy. Your spreadsheet and storytelling skills will need to expand, and strong soft skills including communication, negotiation and influencing are a must.

Moving into FP&A also requires a big shift in mindset. You will be going from reporting what happened to why it happened — and what’s likely to happen going forward. You will need to become future-looking, comfortable with ambiguity, and a creative, big-picture thinker. 

Learn more about making the transition with AFP’s guide, The Transition from Accounting to FP&A.

Where Do You Get the Training You Need for FP&A?

• Find a mentor either in your organization or within the AFP community or shadow colleagues in FP&A, and sit in on FP&A meetings.
• Join a project that overlaps with FP&A or demonstrates the kind of effort required of FP&A.
• Take advantage of your AFP membership to attend webinars, events, roundtables and more.
• Get certified as an FP&A professional with AFP’s Certified Corporate Financial Planning & Analysis Professional (FPAC) program.

The “Career Paths to and Through FP&A” section of the AFP FP&A Handbook will provide you with an idea of the numerous paths that finance professionals within the AFP community have taken.

What Does a Future in FP&A Look Like?

“This [FP&A] is an area that is hot and will continue to be so because of the many transformation initiatives that companies are going through,” said Rubalcava.

According to a recent article in The Wall Street Journal, young professionals and college students are leaving the accounting field in droves. The article states that, “An accounting career, once a launchpad into the upper middle class for hundreds of thousands of Americans, is no longer paying off.” For a number of them, pay is a big factor — analyst jobs tend to pay better. But it is not just the pay that makes accounting less desirable.

With FP&A there are fewer regulations to follow, the intellectual challenge of forecasting and planning is enticing, and you have the opportunity to impact the direction the company is going. In terms of career growth, FP&A is part of the CFO function, meaning it too can help get you the brass ring.

“FP&A opens so many doors,” said Bryan Lapidus, FPAC, Director of FP&A Practice at AFP. “The world of finance is changing, and either you’re going to change with it, or it’s going to pass you by.”