At its core, financial planning and analysis (FP&A) is the process of analyzing past data to gain insight into the financial situation of a business, for regular reports and strategic projections, as well as ad hoc “what-if” simulations. When done right, this type of analysis enables CEOs and CFOs to make informed decisions about the strategic direction of the company.
The FP&A process is typically carried out by a team of finance professionals working heavily with spreadsheets to compile and analyze data. Without proper FP&A, decision-makers are essentially flying blind.
Didi Gurfinkel, CEO of DataRails, has strong feelings on this subject. “FP&A is a critical aspect of forecasting for businesses, but unfortunately the methods we use to carry it out aren’t evolving as quickly as the rest of the landscape,” he explains via email.
Despite its importance, FP&A processes tend to suffer from serious issues. For one, there’s a lot of time-consuming manual work involved. Another major problem lies in ensuring accuracy and preventing human error during manual data manipulation.
FP&A, like other finance tasks, relies heavily on Microsoft Excel. While Excel is certainly a powerful tool, using it to compile and analyze data requires someone to either manually comb through cells or create and maintain complex formulas and functions to pull the needed data.