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Articles

Unified Field Theory: Making the Case for FP&A Standards

  • By Staff Writers
  • Published: 5/21/2014
Despite the importance of financial planning and analysis to companies’ forecasting activities, FP&A responsibilities vary widely by organization—and even by department. Organizations also lack widely accepted FP&A standards and principles, and the range of inputs and methodologies can lead to widely varying results that can adversely impact strategic decisions. In response, a new whitepaper, On the Same Page: The Case for FP&A Standards, addresses the need for clear-cut standards and definitions in FP&A.

Accurate cost-of-capital calculations, for example, are critical to determining companies’ investment decisions. FP&A professionals, however, rely on widely varying approaches to make such calculations, making it virtually impossible to compare transactions. It’s no surprise, then, that only a small percentage of FP&A executives believe their companies’ cost of capital calculations reflect the true cost of capital.

Management would benefit by having more accurate forecasting on which to base strategic decisions. Staff would benefit from a universally recognized set of skills and responsibilities. And companies would benefit from better financial performance created by a well-trained team supplying better analysis that drives better decisions.

Download On the Same Page: The Case for FP&A Standardshere.
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