FP&A is an in-house finance role on the corporate side. FP&A analysts, managers, and directors are responsible for providing senior management and executives with the analysis and information they need to make major operational, financial, and strategic decisions. The group is responsible for running the annual budgeting process, as well as for managing cash flow forecast models, variance analysis, and other financial performance tools. An FP&A analyst will often liaise with treasury staff to discuss cash flows and expenditures. They may also get pulled in to work with corporate development on acquisition opportunities.
The personality of someone who would thrive in a financial planning and analysis role at a corporation often has the following character traits:
Good at managing internal stakeholders
Enjoys using Excel and PowerPoint
High attention to detail
Analyst Interview Prep
Preparing for an FP&A interview requires a thorough knowledge of both technical and behavioral questions. In terms of technical questions, they may be skewed towards financial analysis, accounting, and financial modeling. Questions such as, “How do you evaluate the financial performance of a company?”, and, “How do you build a financial model?”, are common examples.
People typically enter financial planning and analysis from a public accounting firm or by moving up internally from an accounting position on the corporate side. The entry-level position is an FP&A analyst. Analysts can eventually move up to be a manager or director. It can take anywhere from two to five years to move up through the positions. Unlike investment banking or other capital markets positions, you may stay at a certain level for most of your career.
Most people stay on the corporate side once they’re working in FP&A. Opportunities are either to move up internally or switch to another corporation. Moving up could be all the way from Analyst to Director of FP&A, and from there to VP of Finance, VP of Corporate Development, or Chief Financial Officer (read our guide on what does a CFO do).
Here is a breakdown of what you can expect to earn as an FP&A Analyst, Manager, Director or VP. Generally speaking, FP&A analysts/managers are well paid when considering the work-life balance that they usually enjoy in their job.
Analyst: $50,000 to $80,000 (base salary plus bonus)
Manager: $60,000 to $120,000 (base salary plus bonus)
Director/VP: $100,000 to $250,000+
Why Work in FP&A?
Working in financial planning and analysis can be a very exciting career path. Analysts get to perform extremely detailed and important financial modeling used for executive decision making. The group typically works very closely with the CFO and helps support decisions around capital spending, operating budgets, and long-term planning. In addition, they may sometimes be pulled in to support mergers and acquisitions (depending on the size of the company).
The financial planning and analyst department is typically a stable place to work, as they are required in good times and in bad, and teams don’t tend to massively fluctuate in size (the way more sales-oriented jobs like investment banking can).
Key FP&A Analyst Job Responsibilities:
Performs quantitative analysis of operational and financial data
Builds and manages financial databases by organizing and analyzing a wide range of data sources
Prepares financial reports for internal use at the company by collecting, analyzing, formatting, and presenting information
Evaluates new projects and investment opportunities by comparing them with each other
Values the company’s assets by appraising their current condition and useful life
Recommends financing structures (debt and equity) and considers the company’s cost of capital
Builds budgets and forecasts of future company performance
Builds and maintains a corporate financial model that details the entire company’s operations and projects future performance
Performs ad hoc analysis for executives as required