Financial planning and analysis (FP&A) teams play a crucial role in organizations because of their exceptional ability to bring together diverse financial data fragments, ultimately driving company growth. Their main functions involve budgeting, forecasting, and analyzing financial information to support business decisions.

Whether aiming to scale a small company or achieve sustainable growth, FP&A functions are fundamental, and hiring managers expect a set of soft and technical abilities from an FP&A specialist. The article examines the core FP&A skills needed to perform well in this role.

Table of Contents

  • What Is Financial Planning and Analysis?
  • What Does an FP&A Specialist Do?
  • In-Demand FP&A Skills
  • FP&A Education and Qualifications
  • Learn In-Demand FP&A Skills with 365 Financial Analyst
  • FAQs

What Is Financial Planning and Analysis?

Financial planning and analysis (FP&A) is a key function that involves budgeting, forecasting, and financial analysis tasks to support a company’s operational decision-making and strategic planning. FP&A specialists bring together financial data, analysis, and insights from different areas to deliver effective financial planning, decision-making, and performance management within an organization. Think of FP&A teams as trusted navigators, guiding organizations toward financial growth.

In simple terms, if running a business is like driving a car, FP&A is the GPS. It provides the route (planning and budgeting), predicts road conditions (forecasting), analyzes deviations from the planned route (variance analysis), and helps the driver make informed decisions (strategic advice) to reach the destination (financial goals).

In larger organizations, these tasks are performed by FP&A divisions. Smaller businesses might have one or several experts responsible for all financial planning and analysis tasks, including budgeting and forecasting.

What Does an FP&A Specialist Do?

FP&A tasks involve budgeting, forecasting, analysis, reporting, and support of operational and strategic decision-making.

Other daily responsibilities are to collect and record relevant historical data, analyze financial statements, and monitor industry trends and political and economic events that might impact the company’s financial well-being and strategies.

So, what skills are needed to excel in an FP&A role?

In-Demand FP&A Skills

Although a highly technical role, financial planning and analysis requires various soft skills. A successful FP&A analyst needs to acquire a combination of both to perform well on the job.

Financial Modeling and Forecasting

FP&A professionals must be proficient in financial modeling, as well as sensitivity analysis and scenario planning. Understanding the major financial statements and supplementary financial information is critical for the role as they form the basis for performance measurement, enabling FP&A teams to properly evaluate a company’s health.

Data Analysis

The ability to analyze and interpret complex data is essential, with FP&A experts having to acquire impeccable financial analysis skills to identify trends, patterns, and discrepancies in financial data.

Technological Proficiency

With the increasing integration of technology in finance, technical skills are of utmost importance for FP&A analysts. They must be familiar with various finance and accounting tools depending on the company’s needs and business cycle stage.

Being proficient in Excel, SQL, and data visualization software like Tableau is also beneficial, as it enables FP&A experts to conduct complex financial analyses and present their findings in a concise and compelling manner to stakeholders.

In addition, working with AI tools is becoming increasingly important for FP&A experts. Our Intro to ChatGPT and Generative AI course is a comprehensive tutorial on leveraging modern technology to increase productivity.

Business Acumen

Understanding the business, industry, and market trends is crucial for budgeting, forecasting, and providing strategic financial advice. FP&A specialists should be able to connect financial data with business strategies to provide actionable insights.

Communication Skills

Effective communication is another important skill for FP&A professionals because they often engage with non-finance stakeholders. As such, they need strong communication and presentation skills, enabling them to effectively convey complex financial information in a simplified manner.

Letting the data speak for itself isn’t always enough—the most convincing financial reports involve compelling storytelling. A good FP&A specialist provides context to explain the relevance of data and creates a narrative to inspire change.

Business Partnering

FP&A specialists need to understand the bigger picture, including industry trends, the organization’s goals, operations, competitors, processes, and the team’s functions. Building strong partnerships with other teams would allow them to provide more meaningful and actionable insights to increase business value.

Strategic Thinking

FP&A specialists must think strategically about business issues and make recommendations based on financial data and organizational goals. This requires problem-solving abilities and a forward-thinking mindset.

Attention to Detail

Given the nature of the work, meticulous attention to detail is crucial. FP&A professionals must ensure overall data integrity, as small errors can have a significant impact on the final model.

Teamwork and Collaboration

FP&A professionals often work alongside a team of financial experts and collaborate with other departments, so they need strong teamwork and collaboration skills.

Project Management

The FP&A specialist typically manages various projects simultaneously—from budgeting and forecasting to driving strategic initiatives. Not only that—developing strong organizational and project management skills also pays off in the long run, as it fosters career growth.

Ethical Standards

FP&A analysts deal with confidential and sensitive information, so they need high ethical standards and integrity. Given their involvement in important financial decisions, they have the obligation not to disclose confidential information to unauthorized parties inside and outside the organization. This may include details about upcoming projects, company performance, budget allocations, and strategic initiatives.

Remember, these are just some of the core FP&A skills. The specific requirements may vary depending on the industry, company size, and role within the FP&A team.

FP&A Education and Qualifications

FP&A analysts come from various backgrounds, including financial analysis, accounting, economics, and business administration. A master’s degree in any of these disciplines will give you an edge in the job application process, although a bachelor’s may be sufficient if you can demonstrate the necessary skills and experience.

Regardless of your background, obtaining a professional FP&A certification will boost your resume and increase your chances of securing a job or getting promoted.

Learn In-Demand FP&A Skills with 365 Financial Analyst

365 Financial Analyst can help you acquire the necessary expertise to become a successful FP&A analyst. Our FP&A: Building a Company’s Budget course teaches you fundamental FP&A skills like budgeting, forecasting, and financial statement analysis.

The comprehensive 365 Financial Analyst program also offers various data visualization, communication, and business courses to help you acquire the soft skills needed for this role.

Sign up and get a taste of the learning style and materials for free.

What is FP&A in finance?

FP&A stands for financial planning and analysis. The term refers to a set of financial activities that support business decision-making and monitor the company’s financial well-being. The primary FP&A functions involve budgeting, forecasting, and financial analyses that assist with the company’s financial planning.

What are FP&A’s core responsibilities?

The FP&A analyst’s core responsibility is to provide insights based on financial data that are aligned with organizational goals to help businesses’ decision-making and planning. They achieve this by preparing budgets, forecasts, and reports and analyzing relevant financial information.

What makes a good FP&A analyst?

A good FP&A analyst possesses the necessary analytical skills and the ability to apply them adequately in a business context. To this end, successful experts develop various soft skills, such as communication, project management, teamwork, and business and strategic thinking. Technical capabilities may include working with financial software, data analysis, and visualization tools.

What skills do you need to be an FP&A manager?

An FP&A manager oversees the financial planning, budgeting, and forecasting processes within a company. In addition to the technical, analytical, and soft FP&A skills listed in this article, they need to demonstrate leadership capabilities and responsibility.