Finance Planning & Analysis: Ten Ways to Enhance Business Collaboration

Increasingly, finance executives find that they add the most value when they closely work with their business partners to help them make smarter decisions. However this relationship is not always automatic or seamless.

Some FP&A leaders report that they need to work hard on creating a strong partnership with operational and departmental heads.

During two FP&A Roundtables in New York and Chicago conducted by the Association for Finance Professionals in early 2016, over three dozen participants offered advice on how to improve the link between FP&A and the business.

At one global financial institution, the monthly task of comparing budget to actuals has been shifted to accounting, freeing up more FP&A time to focus on building the partnership with the business

Basic foundation

The roundtables, sponsored by financial services firm Peloton, provided a great forum for practitioners to share best practices.

Integrate tactical and strategic processes. One practitioner at a media company explained she’s merged the day-to-day work with the strategic partnering to make sure both become an ongoing part of the relationship with business units.

Change the “Budget Guy” or “FP&A Police” perception. A lot has to do with changing managers’ perception of what FP&A is all about, according Philip Peck, VP of Finance Transformation at Peloton. That means FP&A needs to bring value to the operations, not just say no to investment requests.

Learn the business. It’s very important to build FP&A’s credibility by showing the business leaders that FP&A understands the business, according to the CFO of a not-for-profit organization. “It’s not just about numbers. Make sure you understand the business.”

Business partnering

Separate budget variance analysis from FP&A. At one global financial institution, the monthly task of comparing budget to actuals has been shifted to accounting, freeing up more FP&A time to focus on building the partnership with the business.

“Accounting should be able to speak to the business and handle the first line of questions,” said the not-for-profit CFO.

Granted, a lot depends on how the company is structured, another participant noted. Her company runs a Shared Services model, where accounting staff has little understanding of how the budget has been put together.

Be consistent and over-deliver. “Consistency in delivering the message and delivering results is very important,” said an FP&A executive at another firm.

Added Peloton’s Peck: “Establish trust and credibility by delivering on promises. It’s important to provide accurate data and information on a timely basis, and be flexible in terms of working with the business to accommodate their specific business needs and requirements.” 

According to another practitioner, just delivering on promises may not be enough. “It’s also important to consistently over-deliver, especially on the first time around.” He noted that if business managers are impressed with the value they get, they’re more likely to ask for FP&A help in the future.

Actively seek out opportunities for partnering According to Peck, FP&A needs to put itself in the business leaders’ shoes and anticipate their needs.

Finance should creatively look for ways to add value by providing insights and unique perspectives, improving the efficiency and effectiveness of key activities, and introducing frameworks, models, and structures to enable business leaders to better plan, manage, and run their operational areas.

Evangelize the profession. Finally, a good way of building FP&A credibility with business partners is to educate them on what FP&A does and how it can help them improve their own performance.

One of the FP&A professional at an online company said she went on a roadshow, meeting with business leaders to outline the role of FP&A and how it can drive results. “Since then people have come to us,” she said. “It helped change the culture.”

“I get to know the executive leader or the No. 2 or No. 3. It’s important to identify the influencer. This softer approach can be instrumental in getting FP&A in the room”

Embedding FP&A

Institutionalize the process. One roundtable participant revealed he’s tried a variety of ways to ensure he’s tightly linked to the operations.

First, he offered the business different analyses that helped them reach profitable conclusions – and made sure not to take credit for it. He then moved to identifying senior sponsors and focused on specific projects.

Two other executives managed to bake the finance/business collaboration into the core processes, by doing the following two things:

  • Creating a multifunctional team. At one food-processing organization, each project is headed by a cross-functional team that includes HR, IT and finance – not just the business unit. They meet every Monday and report to the CFO monthly, said the CFO. “I have a great degree of confidence in the process,” she said.
  • Making collaboration a compliance requirement. In another manufacturing organization, finance’s sign-off is part of the requirements under Sarbanes-Oxley control. So if it’s not there, they have to explain why it’s not, according to the Assistant VP of FP&A.

Embed finance in the business. Some companies approach this challenge by embedding FP&A professionals in business units and functions. “While they report to me, they are part of that team,” said the finance executive. 

Build the relationship from scratch. “I get to know the executive leader or the No. 2 or No. 3. It’s important to identify the influencer,” another practitioner said. “This softer approach can be instrumental in getting FP&A in the room,” he added.

It can take time, he acknowledged, and can start with simple short conversations, building up to business discussions. “Ask questions about the business: how do you think about your go-to market strategy? How to you approach running a new campaign?” he suggested.

About the Author

Nilly Essaides is Director, Financial Planning & Analysis Practice, at the Association for Financial Professionals (AFP), a US-headquartered professional society that represents finance executives globally.

Copyright © 2016 Association for Financial Professionals. All rights reserved.

Photo credit: Shutterstock

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