Five Practices of Highly Effective FP&A Teams

  • By Nathanael Vlachos, Rachele Collins, and Steve Player, APQC, and Bryan Lapidus, FP&A
  • Published: 7/23/2019

From November 2018 to March 2019, APQC and AFP conducted survey and interview research of more than 400 FP&A professionals to understand the current techniques, tools, and technologies used by organizations for FP&A and the associated skills required.

Across the board, FP&A teams at leading organizations leverage a common set of practices to provide forward-looking, mature analyses and reporting that truly drive business results. These practices have allowed the most effective FP&A teams to leave their traditional accounting and budgeting role and transform into a forward-looking function concerned with decision-making and the prospective allocation of capital in an ambiguous future.


At leading organizations, FP&A has transformed from its traditional budgeting and scorekeeping role to become an indispensable business partner with a seat at the decision-making table. An analysis of the survey data found that highly-effective and moderately-effective FP&A teams are significantly more likely to consider business partnering skills—which include an intimate knowledge of the business, the ability to translate key data for the business through effective reporting, and a collaborative attitude in working with others—as necessary, in comparison to FP&A teams that were rated as slightly effective or not effective.

FP&A teams that have embraced a business partnering role have quickly become an indispensable source of analysis and insight for their organizations, but business partnering requires careful thought and planning. “Strong finance business partnering is a culture that you have to build, and you have to put the right people in the right roles,” said Geetanjali Tandon, digital and transformational finance lead at Bayer Crop Science. “You have to develop a skillset that allows you to ask questions beyond the report and beyond what the data is telling you.” The study team found that organizations leverage a range of approaches to build business partnering skills, from job rotations to book clubs, finance academies, stretch assignments, and certifications.


A critical success factor of FP&A’s transformation in many leading organizations has been the shift from planning as an annual event to planning as a continual and dynamic process. The study found that very/highly effective FP&A teams are significantly more likely to leverage practices like rolling forecasts, scenario- and driver-based planning, and predictive analytics in comparison to FP&A teams that are slightly effective or not effective at all.

For extremely effective or very effective FP&A teams, these emergent practices have fundamentally changed the nature of planning for the better. Reflecting on her tenure as vice president of FP&A at tw telecom, for example, Nevine White, executive-in-residence at Live Future Ready, noted that the move to eliminate budgets at the organization constituted “a significant shift in the structure of our planning, and more fundamentally, led to a transformation in the relationship between FP&A and the business.” With more dynamic planning and forecasting, FP&A was able to streamline its annual reporting from a budget that was hundreds of pages long to a 20-page summary of the organization’s strategic initiatives, risks, and opportunities.


APQC has found that siloed and non-integrated systems, structures, and processes pose some of the biggest challenges for finance in 2019. Extremely effective and very effective FP&A teams have successfully met these challenges in part through strong partnerships between FP&A and other functions. For example, an analysis of the survey data found that participants rating FP&A as more effective were significantly more likely to have a higher level of integration with treasury in comparison to less-effective FP&A teams.

A strong partnership between FP&A and treasury is a critical success factor for both groups. While treasury traditionally takes a short-term view and is focused on cash, FP&A takes a medium- to long-term view and is focused on accounting income. Relationships between the two entities can help both functions: FP&A can think about the cash impacts of the forecast and initiatives in order to inform treasury, while treasury can warn FP&A about risks and opportunities in the capital structure (such as shortfalls, credit risk, and rating agency requirements) that may be useful to forecast for the overall health of the organization.


The study found that technology is a critical enabler of FP&A’s ability to form and maintain strong business partnerships, especially when it comes to communicating insights that help drive the business forward. Providing these insights requires clearing time and space for more value-added work—an opportunity that many organizations have yet to take advantage of. Respondents to the survey reported that their FP&A teams spend 75 percent of their time gathering data and administering processes, down only two percentage points from 77 percent when the question was last posed nearly a decade ago in 2010.

FP&A organizations rating themselves as very or extremely effective were significantly more likely to leverage data visualization tools and reporting automation to spend less time gathering and managing data and to communicate the key takeaways of reporting more effectively. For example, the finance lead at the global technology company profiled in the study reported that the organization’s bottom-up and top-down forecasting processes once took 600 to 700 people and three weeks to complete. With machine learning tools, cycle times for forecasting have been reduced from weeks to hours, the variance rate has been cut in half, and labor hours have been markedly reduced.


According to FP&A expert Philip Peck, emergent technologies and capabilities like machine learning, cloud computing, RPA, and AI “have played a role in helping FP&A move from providing hindsight to insight to foresight.” The study found significant opportunities for growth when it comes to providing this foresight: Only 22 percent of respondents, for example, would characterize their analytics as playing a prescriptive or predictive role, and far more continue to leverage standard practices like diagnostic and descriptive analytics. Respondents that ranked their FP&A teams as extremely or very effective, by contrast, had significantly higher levels of maturity in their analyses.


The practices leveraged by the most effective FP&A teams represent more than a passing fad. Across the board, the FP&A leaders and process owners interviewed by the study team reported that these practices pay real dividends in terms of stakeholder satisfaction, the ability to drive business performance, and the perception of FP&A as a valuable business partner. Preparing for the next level of financial planning and analysis means investing in these approaches for business partnering that helps drive the business toward success.

As principal research lead, Rachele Collins, Ph.D., is responsible for APQC's best practices research in financial management. A certified Senior Professional in Human Resources, her education includes the University of Texas at Austin (BBA) and Texas A&M University (MBA finance, Ph.D. HRD).

Steve Player is a senior research fellow working with APQC's financial management research team. Player is co-founder of Live Future Ready and the North America program director of the Beyond Budgeting Roundtable (BBRT).

Bryan Lapidus, FP&A, has more than 20 years of experience in the corporate FP&A and treasury space working at organizations like American Express, Fannie Mae, and private equity-owned companies. At AFP he is the staff subject matter expert on FP&A. Bryan also manages the FP&A Advisory Council that acts as a voice to align AFP with the needs of the profession.

For more best practices in FP&A, check out the FP&A Track at AFP 2019.

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