What does FP&A (Financial Planning and Analysis) stand for in business?

Jason (P) David

There are so many business acronyms and a popular one that we get asked about often is “what does FP&A stand for in business?”

FP&A stands for Financial Planning and Analysis and this is a major role within a growing organization.

Financial Planning and Analysis is usually done by a team and they are responsible for analyzing a company’s budgets and forecasting duties.

This role supports major decisions made by the key executive like the Boards of Directors, Chief Executive Officer, and Chief Financial Officer.

It is almost impossible for a company to continue to grow without carefully reviewing and analyzing a company’s cash flow.

This is where the Financial Planning and Analysis team plays their role in conjunction with the CFO.

Here are some key elements and roles that Financial Planning and Analysis teams do:

  • Understand economic and business trends and how they effect or could possibly effect the company in the future.
  • Review and analyze YTD (year-to-date) performance of the company as well as any past performance.
  • Attempt to forecast or foresee any potential problems or obstacles that may arise.
  • Review financial statements including detailed line items like expenses, taxes, capital, expenditures, and investments.

FP&A teams should not be confused with accountants because they are actually quite different in that accountants do the actual record keeping while FP&A Analysts examine, analyze and evaluate the companies overall financial health.

They then take this information and help map out the financial future of the company.