What is FP&A?

FP&A stands for Financial Planning and Analysis, the function responsible for budgeting, forecasting, financial modeling, and strategic analysis. FP&A teams translate business strategy into financial projections and help leadership understand the financial implications of decisions. In smaller firms, the owner or fractional CFO handles FP&A responsibilities.

Core FP&A deliverables

The annual budget sets targets for the year. Monthly forecasts update projections based on actual results. Variance analysis explains the differences between the plan and the actual. Scenario models test assumptions about hiring, pricing, or expansion. Board reporting packages communicate performance to stakeholders. Each deliverable serves a distinct planning or communication purpose.

FP&A for professional service firms

Service firms need FP&A focused on utilization, billing rates, and project profitability. Revenue forecasting depends on pipeline, close rates, and staffing capacity. Cost forecasting centers on headcount and compensation. Model scenarios around hiring timing, rate increases, and service line expansion. Connect financial projections to operational metrics.