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FP&A Business Partnering: Creating the Right Structure

  • By Bryan Lapidus, FP&A
  • Published: 11/19/2019


FP&A is coming into its own as an organization under the CFO. In the past, it might have been defined as “everyone in finance who is not in accounting, treasury or tax,” but today there is a defined vision, set of skills, and body of knowledge for FP&A. Leadership needs to make the investment and changes to create a business-partnering organization that is designed to succeed.

“If you say something is important you, you’ve got to look at the wallet. You can’t just tell people that something is important and ask them to do it. Management needs to back it up,” said Melanie Jameson, finance director at Premera Blue Cross, a healthcare company in Seattle.

Here is how to set up the structure.

Create a mission statement. The mission statement announces to the business what they can expect from FP&A, and what the team members will deliver. It establishes the mindset and aligns with other parts of finance. The CFO retains the role as the steward of a company’s capital and separates that responsibility among different departments: capital control responsibility remains with accounting/controllership, capital movement is housed in treasury, and oversight is with audit. The forward-looking capital decision resides within FP&A. From here, define the department; the sidebar provides more specifics.

FP&A reports directly to the CFO or the business, rather than other finance departments. FP&A needs to be a forward-looking organization, whereas others are generally rear-facing positions. This does not diminish the latter’s importance, but rather expresses the need to avoid having FP&A report to accounting specifically.  

FP&A structure is a function of size and maturity. The staffing and deployment of FP&A resources changes in order to meet the needs of the enterprise and provide effective partnership. Our research describes three levels of complexity in the organizational structure corresponding to company size.

  • Level 1: HQ staff perform business support. The centralized FP&A function is responsible for all FP&A activities, including budgeting, forecasting and planning, creating scenarios for the CFO, etc. They may have identified a “go-to” person for particular units, allowing a closer relationship, and that resource may support multiple units. This may work well in small companies, but the risk is that this level lacks the capacity to provide decision-making support and advanced analytics to operations. Accounting or treasury have sometimes performed this function.
  • Level 2: Finance embeds FP&A staff in the business units. Increasing in size and sophistication, HQ FP&A staff embed FP&A practitioners in the business units to support rapid decision-making, develop strong ties with business leaders and true business knowledge and expertise.
  • Level 3: Finance deploys local business consulting teams. Companies split finance into three separate organizations: a shared service center (SSC) that handles day-to-day activities, a centralized business support group or Center of Excellence (CoE) that performs standardized and ad-hoc analytics, and a separate front-line, embedded layer of “business consultants” whose sole role is to provide advice and decision-making support by working with the businesses.

For more insights on how FP&A can be a better business partner, download the guide.

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