FP&A planing foreacasting and budgeting process? please help
Hey guys, I have a phone interview next week for the fp&a role. I’m in the financial service industry before and wanted to switch to a more financial analyst role. I know the basic stuff of accounting and finance, but I don’t have the actual experience in fp&a position (even though I put some related things in my resume). Can someone please tell me the specific process of how to do the planning, forecasting, and budgeting? or something related to cost analysis?
The phone interview should be 45 mins, what questions do you think I'll be asked? or what experience should I present to the hiring manager?
Thank you!
Without getting into too much detail...
On an annual basis, a company will prepare its long range forecast (or 'strategic plan'). This lays out the near-term actions the company needs to take to achieve its mid-term objectives (typically 1-3 or 1-5 year horizon). Year 1 of the LRF should form the foundation of the operating plan for the following year. Periodically (i.e. monthly or quarterly), the company will re-forecast its expected performance against the op plan. The re-forecasts form a better expectation of where the company will finish the year and are fed into the next planning cycle. Rinse, wash, repeat.
The frequency and depth of these exercises will vary depending on the maturity of the business and savvy of the management team.
- LRF: 2Q/3Q (board review at the end) - Op plan: 4Q (board approval) - Forecasting: year-round (no board involvement)
Analyst level will consolidate data and, perhaps, make pages depending competence/trustworthiness
Depends on a lot of factors... I tend to create budget templates for each P&L/'cost center' owner to submit to ensure accountability (headcount roster, sales by customer/salesman, full income statement)... this will depend on the business
I've done it many ways... the type of business will determine what needs 'more detail' built around the assumptions. Smarter boards ask more detailed questions that require more backup... my rule of thumb has always been to 'collect enough data to answer questions one layer deeper than you anticipate being asked'