Kevin Briggs

Financial analysis and planning is a basic skill in management accounting. Initially, the skill is earned in the field of operational finance and progresses to strategic planning. It is a skill that is required of virtually all assignments that I have undertaken because without it, budgetary control, which is a common financial control, is not possible. In a constructive sense, this is the skill that reports to cost managers their cost behaviour and to sales managers their sales performance in terms of sales orders, invoicing and overall profitability by whatever segmentation is appropriate to the business.

The strategic side of FP&A is covered in the section raising funds from external sources. Invariably, this is the output from the strategic aspect of financial planning and analysis roles and involves salesmanship, (sorry, "excellent presentational skills") as the accountant is expected to persuade the external funds source to part with cash. However, an important aspect of this activity is to ensure that the numbers in the business plan are consistent with the other strategic objectives that are listed in the plan, such as the acquisition of resources, the conversion of those resources into capabilites, marketing positioning, competitive forces etc.

Therefore, the processes that go to make up a financial planning and analysis prroces is particularly important because it is of major operational and strategic importance. I have been responsible for establishing and running these roles in a number of different circumstances (which depends on the strategy of the organisation), including Fiddes Payne Ltd, Interconnect and Securicor Telecom, Ultralife Batteries, Bookham Technology and Digipos Group.

Note that not all organisations regard formal budgetary control as an important financial control; in fact some businesses do not use budgetary control at all, preferring to use alternative devises to budgetary control instead.

Finally, note that there are two related pages to this subject, implementing or improving reporting and forecasting systems and the special case of the business case.