Financial Planning & Analysis (FP&A) Overview
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.
More FP&A career development resources: how to be the best financial analyst.
FP&A Personality Traits
The personality of someone who would thrive in a financial planning and analysis role at a corporation often has the following character traits:
- Detail oriented
- Good at managing internal stakeholders
- Strong communicator
- 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 side 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.
For a full list of possible interview questions and answers, please see our FP&A interview questions and answers.
FP&A Analyst Entry Point
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 2-5 years to move up through the positions and, unlike investment banking or other capital markets positions, you may stay at a certain level for most of your career.
Financial planning and analysis roles are common for a B.Com career path.
Most people stay on the corporate side once they’re working in FP&A and 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, long-term planning, and sometimes may 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
Screenshot from CFI’s financial modeling courses.
FP&A Career Prep
Taking financial analysis courses is the fastest way to learn what’s required in a financial planning and analysis job before you get hired.
It’s important, to start with a strong understanding of accounting fundamentals and reading financial statements. From there you should have a solid Excel crash course under your belt, which will teach you the basics, including shortcuts, formulas, and functions. Beyond that, you can progress to more advanced courses, which will teach you how to perform valuation and financial modeling.
If you want the best value for a wide range of courses, check out CFI’s Full Access Bundle.
More helpful resources
We hope this has been a helpful guide to being an FP&A Analyst or Manager. To continue planning your career path, we highly recommend these additional resources: