If you follow my writing about FP&A best practices, you will recall that I have often commented on how I see the FP&A world in terms of systems, talent, process, and institutionalized discipline. You might also be familiar with my FP&A presentations that show this illustration:
The seamless and elegant interaction of each of these FP&A components is what creates a center of excellence inside an organization. It becomes a “go to” department for C level and VP GM level decision making. Moreover, each component expands into a clear understanding of the requisite personnel, key deliverables, performance measurement for effectiveness and leadership nuances that drive success in that particular component.
But there is one thing that runs through each component and is the absolute determining factor in organizational success. That component is PROCESS.
What is Process?
I asked Perplexity AI and here is what it told me:
In a corporate FP&A (financial planning and analysis) context, a process is the repeatable, structured set of activities, inputs, and outputs that a finance team follows to produce a specific management outcome—such as a budget, forecast, variance analysis, or management report.
More concretely, in FP&A, a process typically:
- Has a clear purpose and deliverable (for example, “build and approve the annual operating plan” or “produce monthly forecast and variance commentary”).
- Follows defined steps with owners and timelines, such as data collection, validation, analysis, review, and sign‑off.
- Uses standardized inputs (actuals from ERP, drivers from business units, assumptions about market conditions) and produces standardized outputs (P&L, cash flow, headcount plans, dashboards).
- Repeats on a regular cadence—monthly, quarterly, or annually—and is governed by documented policies and calendars.
- Is designed to support decision‑making by turning raw financial and operational data into insight and recommendations for management.
It’s not a bad definition. The focus here on inputs and outputs along with references to ownership, accountability and cadence is accurate.
The next logical question is why is process important? This of course means “other than because finance people tend to be organized, type A personality types who need everything lined up properly”. Process is important because it is the lynchpin in getting the most out of your FP&A organization. Said differently, process is what allows you to get your money’s worth out of FP&A. These are the pieces that need to be healthy:
Data Collection and Assembly
Calendar management
Systems Installation/Maintenance
Deliverable Execution
To get what you are really paying for when it comes to FP&A you must have:
Analysis that Supports Decision Making
The only way for organizations to get what they pay for (Item number 5) is to do items 1-4 very well. Institutionalized discipline and process separate good FP&A teams from mediocre FP&A teams and paving the way for the analytical thinking that FP&A leaders provide.
When pushed through the lens of the distribution of resources here is what it looks like:
When data collection and deliverable execution command 80% of the team’s time, it is difficult to get at the heart of what FP&A people are hired to do. Identifying how much of the FP&A team’s time is spent on analysis that supports decision making is a first step toward making positive improvements.
How are your FP&A processes? If you need some organizational diagnostics, FP&A Expertise is here to help.