Author: Joe Maule, CFA
June 23, 2025
Finance teams today do much more than close the books and report history. At its best, Financial Planning and Analysis (FP&A) shows what’s happening right now, flags trouble or opportunity before it hits, and points to the smartest next step. The ten habits below will help your company earn more, keep cash in the bank, and give investors greater peace of mind.
A static annual budget becomes outdated as soon as markets move or new costs hit. A rolling, driver-based forecast that refreshes each month or quarter keeps leaders looking twelve to eighteen months ahead. When the model updates automatically from sales units, average price, or churn, managers spot trouble early and adjust spending before it hits the income statement.
Should you raise prices, enter a new region, or buy a smaller competitor? Scenario modeling turns those options into clear numbers. Build three versions: optimistic, base, and downside. Change one driver at a time so the impact stands out. Decision meetings move quicker when everyone sees the upside and risk quantified in dollars.
Lists of metrics can feel like alphabet soup, and teams struggle to link them to financial goals. Choose the handful that truly drive revenue, cost, and cash, then publish a simple bridge each month that shows plan versus actual and explains the gap. When every KPI has an owner and a clear story, teams focus on levers they control and trust between finance and operations grows.
Many projects win funding on enthusiasm alone. That approach is not optimal. Instead, a disciplined capital review compares every proposal with Net Present Value and Return on Invested Capital, then ranks them side by side. Money flows to the highest-return projects, not the loudest voice, and margins rise because cash is no longer wasted on low-yield work.
Profits can look fine while cash is tied up in inventory or late invoices. A thirteen-week cash forecast that rolls every Friday shows peaks and valleys in advance. With visibility into receivables, payables, payroll, and loan covenants, finance avoids emergency loans and earns lower borrowing costs.
Finance reports can feel like a foreign language to sales, product, or engineering teams. To build connections, embed analysts in key functions. Translate numbers into stories with a clear headline, three data points, and one action step. Clear storytelling, supported by visuals first and tables second, helps non-finance partners act faster because they understand the “why,” not just the math.
Interest rate spikes, currency swings, or supply shocks can crush profit if you are not ready. Run severe but plausible tests that push sales down or costs up, then rank the biggest pain points in a tornado chart. Knowing the limits lets managers hedge, diversify suppliers, or pull cost levers before a crisis hits.
Manual data collection keeps analysts stuck in spreadsheets instead of solving problems. Feed information from Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) systems into a single cloud database. Automation cuts close cycles to hours, and simple Artificial Intelligence models can flag outliers or draft variance notes. Analysts spend more time advising and less time formatting. If you don’t know the next step, ask a tool like ChatGPT. It is an infinitely patient personal tutor.
A cost number is meaningless without context. Benchmark Selling, General, and Administrative (SG&A) expense, growth, and margin against industry medians. Compare growth and margin trends to direct rivals. Benchmarking highlights true gaps and protects budgets that are already lean. Showing that your cost base is in the top quartile builds credibility with the board and investors. Highlight wins as well as gaps to keep morale balanced.
Debates over whose report is “right” waste entire meetings. A data dictionary with one owner per field, locked hierarchies, and read-only access to critical tables ends the argument. Clean, trusted data lets the team focus on action instead of reconciliation.
When these ten practices work together, they form a strong FP&A operating model:
1. Governance first keeps data clean.
2. Automation and AI turn raw data into quick insight.
3. Rolling forecasts, scenario modeling, and stress tests guide daily choices.
4. Capital allocation and KPI ownership link choices to long-term value.
5. Business partnering and clear storytelling turn insight into action.
Think of it as a flywheel: better data leads to faster analysis, which leads to smarter decisions, which fund more automation, and so on.
1. “Excel on steroids.” Fancy formulas cannot fix messy data.
2. Analysis paralysis. If a report does not drive a decision, drop it.
3. Ignoring change management. Teach teams how to read new reports, otherwise, they will stick to old habits.
FP&A is about lighting the road ahead so every dollar, hour, and idea works harder. Whether you are a seasoned CFO or a new analyst looking to grow, master a few of these habits and you will see faster decisions, stronger cash, and a team that trusts the numbers. Keep building until FP&A becomes the quiet engine behind every smart move your company makes.
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