Do you have dreams of climbing the corporate ladder? A career in financial planning and analysis is very promising, especially as the U.S. Bureau of Labor Statistics expects the industry to grow 17% by 2033.
Whether you are just starting out in your FP&A career, somewhere in the middle, or near the top of the chain, it’s important to understand what your job will entail. This is exactly what we’ll cover in this article, helping you move up the ladder confident and prepared.
FP&A Analyst
Most financial analysts will start their career at the bottom, such as in an intern position or as a newbie analyst. In this phase of your career, you will focus on gathering, interpreting, and analyzing data to support your organization’s goals. For example, if your company is in the real estate sector, you might evaluate tentative acquisitions or the return on investment of different holdings. Here are some common responsibilities of a FP&A analyst:
- Monitor and evaluate financial activities and transactions
- Prepare reports that outline performance
- Determine the profitability of different investments
- Perform financial health assessments
- Put together financial models and forecasts
- Evaluate prevalent risks and offer reduction strategies
- Support senior management with data to make informed decisions
For example, a FP&A analyst might evaluate a list of ten potential acquisitions to help management narrow down the list or calculate the return on investment of current holdings. When just starting out as a FP&A analyst, expect a salary range of $50,000 to $70,000.
Effectively completing the responsibilities of a FP&A analyst requires a few fundamental skills. For one, you need to be proficient in Microsoft Excel. Excel is widely used to put together financial models and forecasts. Other important skills include problem-solving abilities, critical thinking skills, attention to detail, and an understanding of financial reporting standards. Check out our Microsoft Excel Bootcamp to expand your Excel skillset.
Senior FP&A Analyst
After one to three years, your job title will change to senior FP&A analyst. Senior analysts take on more responsibilities in the company. Instead of preparing initial forecasts and models, you might be reviewing them and adding value based on your knowledge. For example, you might review the narrowed down acquisition list from an intro FP&A analyst and develop financial models that project revenue, expenditures, and cash flow. Senior FP&A analysts will have some key responsibilities within their companies, including:
- Taking the lead on financial forecasts
- Creating company budgets
- Conducting in-depth scenario analysis based on identified risks
- Providing financial recommendations based on compiled data
- Collaborating with different departments, like accounting or acquisitions
- Ensuring accuracy in financial and accounting reports
- Refining risks identified by intro-level analysts
Senior FP&A analysts will build on the skills learned in intro-level positions. This includes advanced financial modeling and analysis using Excel, building meaningful relationships with stakeholders and upper management, and displaying leadership qualities to help their team make informed decisions. Both hard and soft skill development will be crucial in a senior FP&A analyst role. The average salary range for a senior FP&A analyst is between $65,000 and $85,000.
FP&A Manager
After another few years, the next stop on your career journey is a FP&A management position. FP&A managers oversee the intro and senior analysts, verifying their work outputs and building a strong workplace culture. While some FP&A manager positions focus on one sector of the business, others can take on a broader role in the company, overseeing different business segments. Here are some of the fundamental tasks a FP&A manager will conduct:
- Oversee the financial planning process
- Develop and refine financial models created by lower-level staff
- Create variance analysis between actual and forecasted results to make more informed decisions
- Conduct performance reviews of intro and senior-level staff
- Develop financial reporting standards and processes to unlock efficiency
- Present financial information to directors and CFOs
While you will be maintaining intro and senior FP&A analysts, you will also complete more complex analyses. For example, you might adjust the process for identifying target companies in your real estate company, such as by integrating new software programs or monitoring your risk tolerance. Because of the added insight, a salary range between $85,000 and $115,000 is common.
Excelling in a FP&A manager position relies on refining hard and soft skills. By this point in your career, you should be a master at Excel, being able to easily create complex models and analyses. Similarly, your soft skills, like communication, should also be advanced. FP&A management positions frequently communicate with different departments and supervise staff, which makes soft skill development non-negotiable. Expanded insights and analysis capabilities are also crucial skills to have. You should have the analytics expertise and strategic vision to guide your team toward its goals.
FP&A Director
Each organization will differ in the minimum work experience to make it to FP&A director. However, expect to stay in a management position for three to five years. A FP&A director, also known as a VP of FP&A, is a senior executive role, overseeing departmental managers and focusing on bigger picture decisions, like goal setting and organizational initiatives. Here are some of the common tasks of a FP&A director:
- Projecting long-term financial goals and initiatives
- Managing and tweaking budgets set by managers
- Developing financial reports and high-level analyses
- Implementing risk reduction strategies
- Evaluating the performance of lower-level staff
- Implementing team leadership and development initiatives
- Communicating with stakeholders and the CFO
- Finding ways to improve existing financial processes and procedures
For example, you might be tasked with securing new investors for a real estate deal, monitoring the market outlook for the next six months to adjust the company’s operations, or finalizing which target acquisition the company will pursue. The technical background and leadership qualities of a director lead to an average salary between $100,000 and $250,000.
One of the most desired skills in a FP&A director position is leadership capabilities. FP&A directors are in charge of different managers and staff, making soft skills and leadership capabilities paramount to success. Additionally, you will need a deep understanding of technical skills like financial modeling and forecasting. After all, team members will come to you with any questions. To develop your soft skills, check out our Finance Professional Soft Skills course.
CFO
Holding a FP&A director position can lead to a role as a CFO. Becoming a C-suite executive means you are the tone at the top. You make the final decisions, and all other staff members report to you. You have a direct impact on the success of your organization, with stakeholders relying on you. Here are some of the other tasks found in a CFO position:
- Eliminate operational silos to improve efficiency
- Make high-level, data-driven decisions in line with organizational goals
- Develop insights related to growth and planning initiatives
- Communicate directly with stakeholders
- Maintain financial reporting and compliance functions
- Ensure the organization’s financial strategy is being carried out
- Track cash flow to meet the organization’s goals
- Manage FP&A directors
All of the skills you learn on your career path to become a CFO are important. You need to have an extensive working knowledge of complex financial modeling and reporting while remaining a strong leader. You should be able to complete the basic skills of an intro financial analyst and have the knowledge to lead your organization toward its goals. For example, the CFO will communicate directly with an audit team, have the final say on financial statements, and ensure the company is on track to meet its goals. A salary upwards of $250,000 is common for this title.
Summary
Which stage of a FP&A career are you at? Have you mastered the required skills? Before you can advance your career, you need to have the necessary skills to succeed in your new role. Continuing your education and learning can put you on the fast track to climb the corporate ladder.