The chief financial officer is mainly responsible for the financial accounting of the company. Therefore, this function is mainly a historical record preservation function, which can ensure that the company's account books are in good order. The main tasks include monitoring the company's financial report and regulatory requirements. Tax returns usually fall within this scope, or as an independent function of CFO.
If the CFO's task is to ensure that all historical figures are orderly (that is, financial accounting), then the FP&A team's task is to ensure that the forecast is orderly (management accounting). Specifically, the team is mainly responsible for planning, that is, making budgets, making regular forecasts, and helping top management make decisions.
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Specific responsibility
The main responsibility of FP&A is to link the long-term "strategic plan" of senior management with reality. Strategic plan is a top-down document promoted by senior managers, which can set high-level goals (income, net income, core strategic plan, etc.). ) is the company's next 2- 10 years. FP&A's job is to work out the operational and financial plans needed to realize the strategic plan of management. This process is also called enterprise performance management.
Historically, this means that FP&A will make a basically static annual budget, which will be updated once a year. However, with the rapid obsolescence of static budgeting, FP&A teams need to budget more and more? Rolling forecasting, which should be carried out simultaneously with traditional budgeting, should also be completely replaced.
As a key part of the forecasting process, the FP&A team conducts? Difference analysis? Show management how the budget and/or rolling forecast compares with the actual performance.