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Basics of Effective Business Partnering in the Finance Function



As an FP&A professional, one of the key foundation points is to build trust and respect with the business. Trust comes in many forms and is built over time, and isn’t something that can be obtained immediately. Respect is founded upon the provision of quality and timely outputs that the organization can rely on as a trusted partner. Those in business partnering roles have a unique and valuable role in supporting both strategy and execution in their organizations. The business partner is critical to ensuring a realistic strategy is on track. Business partnering roles support the highest leadership levels of an organization and have access and visibility into the horizontal and vertical layers of the company. They quickly and accurately assess core competencies and track progress to targets from this viewpoint. Business partners are vital in communicating the strategy across the organization to build trust and buy-in while ensuring functions are focused on critical activities. In addition, business partners ensure valuable and cutting edge resources are acquired and then aligned to common goals.


Steps to Success in FP&A Business Partnering


1. Begin with Basics and Establish Knowledge Base


All FP&A professionals will generally start off with building reporting templates, providing commentary and analysis on the performance of the business. This could include providing commentary on the variance to forecasts and budgets and providing insights to recent trends being observed. This generally requires partnering within the finance community as well as sales teams. FP&A professionals should do the following in order to establish a foundation of knowledge:


  • Understand key drivers behind what did or did not go well

  • Interact with the sales teams

  • Establish relationships with the key figures involved in forecasting and budgeting

  • Look into seasonal fluctuations that could occur throughout the year

  • Provide factual commentary and insights to the organization

  • Clearly understand the source of data

  • Own your errors and do not swipe anything under the rug

  • When acknowledging an error, indicate what you will do to avoid it in the future


Such knowledge will enable you to assist the sales team, validate or test assumptions and ensure forecasts make sense and can be substantiated based on the moving parts in the business.


2. Be a Reliable Source of Information


Among the most daunting aspects of being a reliable business partner is to acquire data that is consistent and is the source of truth. This is where the foundation has to start and be built from. If you do not have reliable data the analysis you execute or the advice you give to the organization will not be reliable and, therefore, will not be taken into consideration. In order to become the source of truth, you should do the following:


  • Establish the business rules for data extraction

  • Upload reliable data into a FP&A software that enables multi-dimension reporting with real time updates

  • Make sure that the data you obtain is reliable and free of errors

  • Data must be able to be traced to the source

In recent years, finance teams have been able to consolidate data like never before with high tech tools like FP&A software. This has enabled the finance function across industries to execute analyses on data obtained and split out/slice the data based on whatever the needs of an organization may be. Such a dynamic also empowers the finance function to partner with IT.


3. Cultivate a Deep Understanding of the Business


This action requires you to collaborate with other areas of the business and learn the end-to-end processes. If an opportunity presents itself to work on an ERP implementation, you should take it. Although this is difficult, grueling work and requires longer hours, it allows you to gain superior insights into how the business is run and where and how the profits are reaped. It also enables you to partner with the operations/supply chain teams in your organization.


4. Be Future-Oriented


What is perhaps the paramount step in business partnering (as well as career progression) involves a more thorough understanding of where the business wants and needs to grow. Involvement in the 3-5-year planning process provides you with a strong indication of where the business is heading, where it needs to invest and also what resources may be required to arrive at your goal. It may also indicate your exact costs that need to be considered and where SG&A cuts may need to come from. Properly anticipating the future as a member of the FP&A function requires the following:


  • Obtain an understanding of the pipeline opportunities, the likelihood of them occurring and how this may end up impacting the performance of your organization. Without a solid pipeline, there will be limited opportunities for your company to grow.

  • Work on budgets and forecasts and create bottom-up driver-based planning based on past information

  • Working on these allows you to partner with GM’s, HR, Marketing and the SLT (Senior Leadership Team) in your organization or department.

  • Build up a strategy: You need to obtain a deep understanding of where and how the business will grow, understand the business interaction with companies and commercial partnerships outside your organization


Examining future and pipeline opportunities may require the generation of financials for input into a business case and assessing contracts/commercial terms of the negotiations taking place. This allows you to partner with commercial and legal teams.


5. Involvement with Transformation Initiatives


As finance professionals progress and become trusted business partners in their organizations, they may get involved with company transformation initiatives. If asked to get involved, this is a strong indication that the given finance professional is a trusted advisor and possesses in-depth knowledge of the business, processes, systems and the many moving parts and people in their organization. The following is generally examined when transforming a business:


  1. Systems improvements/digital transformation: This requires one to define the technology and sources of truth systems for different areas within the organization.

  2. Sales Opportunities: Formulate a strategy to drive committed growth where accountabilities are marked.

  3. Efficiency Initiatives: Improve processes and ultimately save time and have a competitive cost structure.

  4. Reorganization : Ensure the appropriate span of control and layers are set in place to enable effective decision making.