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They Need A VP Of Financial Planning & Analysis, But What Do They Mean, Where Do We Start?

They Need A VP Of Financial Planning & Analysis, But What Do They Mean, Where Do We Start?

The FP&A role can mean different things in different settings, and it can have a different focus depending on what a company’s critical success factors happen to be. There are some consistent themes across most company types and industries, below we outline some thoughts on what should be looked for under all circumstances, and then point to some unique needs that might be relevant to the nature of your business.

To begin, the FP&A function is core to your understanding of trends and future opportunities in your business. Financial planning reflects business activity, so senior FP&A staff need to have some business sense. This can come from time spent in operations, ideally as a divisional head of finance. There are ways of thinking that come from this type of experience, and these may not be present in someone that has risen solely through the ranks of the Controller’s department.

Your head of FP&A must also see the total corporate picture. In effect they are the alter-ego of the Corporate Controller, one reports on total company history and the other uses that information as a baseline to project history forward. These roles are natural allies, the head of FP&A must understand your top-level corporate issues, know how they are being accounted for, and forecast how these effects may evolve moving forward.

Next, so much of the work begins by pulling information from large enterprise databases that familiarity with information management and the creation of macro files is really important. Most experienced candidates can learn your particular enterprise system, but all need to have familiarity and a facility with the management of large bodies of financial information.

To be effective your FP&A team must interface with the various departments or divisions within your business. While a taciturn Controller can be accommodated, your VP of FP&A must be someone that can gather information from your operations while at the same time “leaving a smile on their face’. Interpersonal skills are often a key to success in the role.

Apart from core skills in accounting and finance, those are some of the key attributes that all VPs of FP&A should demonstrate. Your situation may be unique in certain ways, so you may need to find a candidate with a background that matches those needs.

For example, you may be judged more on your revenue than your profitability –, particularly at an early stage. Here you will likely want to find a candidate with extensive revenue forecasting in their background. You may instead be a large contract manufacturer where a detailed understanding of your cost structure is key and forecasting of your cost trends is a critical path need. Here you may want to find a candidate that has plant controllership in their background.

There are many other “focus areas”, we decided to just list a couple of examples.

At Frederick Fox, we specialize in placing Finance and Information Technology professionals. Feel free to contact us for more depth on the FP&A role in general and the things we might suggest you specifically consider the FP&A position in your business.

The author recently joined Frederick Fox as a partner after a long and successful career as a senior financial executive. He was previously the CFO at 5 different public companies and a director and audit committee chairman at another. He heads up our VP and C-Suite activities with a particular focus on financial roles.