The first step in forecasting is to understand where we are today and how we arrived at that point from the past. This is gain through analysis and reporting.
Tools and processes used by finance and FP&A (commercial management, billing, accounting, operational statistics, competitive intelligence, planning, budget, forecast, variance analysis, reporting) needs to be customized in order to achieve both efficiency and relevance. There is nothing like on the shelf tools.
Are your KPIs, Scoreboards and other metrics safe from the Simpson's paradox?
Forecast accuracy is often a subject of discussion. What are the issues met that can generate such level of discussion?
By FP&A suite, we shall understand here the different elements that are needed to manage a given business. Obviously, industry is a keep differentiator but how does this reflect in practice? What are the key elements that needs to be in the suite and on what basis shall it be customised?
Finance and FP&A communities are regularly traversed by theoretical and generally hot discussions concerning few topics that are at the heart of FP&A processes. Analytics systems, business partnering and budget are currently among of the main one.
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There are several key components in the FP&A role. The way profitability is analysed and used to improve the business results is one of them.
Most large and medium-size companies are within ecosystems with increasing complexity and evolutions speed. Globalisation, regulations, technological changes, competitor moves, innovations, customer demands change and few others are the source of this increase in complexity and change speed.
Here are two laws that should question a few paradigms in company management and finance. Applied to company management those two laws bring few questions.
Among the difficult subjects for FP&A and management, there is the very “sensitive” relation between budget or forecast and managers compensation scheme.