FP&A today is growing more attractive to many accounting professionals. While it builds on accountants’ core skills, FP&A is evolving into a dynamic function, a true partner to the business, and a strategic ally to management. Its appeal to accountants is that it is a higher visibility role—one that provides valuable professional development opportunities. However, for accountants interested in making the transition to FP&A, many questions remain—particularly, what skills they can bring to their new role, and which new skills they need to acquire.
This is the first of two articles about the challenges and opportunities accounting processionals face when making the shift to the financial planning and analysis (FP&A) profession. This article (Part one) focuses on key differences between the two functions in terms of required skill sets. Part two will highlight how to successfully make the transition.
FP&A professionals, many with accounting backgrounds, point to the following skills they needed to acquire in making the transition:
- From backward to forward. While accounting is more concerned with the details of what happened, FP&A professionals are more focused on the future, where detail is less important, according to David Axson, managing director for CFO and enterprise value at Accenture Strategy. “In fact, the more detail you put in the forecast, the more likely you are to be wrong,” he explains.
- From exactly accurate to directionally right. Accounting requires a very high level of accuracy, and much effort and time are spent sorting out numbers and ensuring correctness and accuracy. Meanwhile, according to Tom Russell, vice president of corporate FP&A at Welltower, “FP&A is, a discipline that can never be 100 percent accurate. Answers that are ‘directionally correct’ and meaningful are more important.”
- The “Why?” vs. the “What?” While both FP&A and accounting professionals need to be analytical, “Accountants give you the balance sheet and the income statement,” says Larry Maisel, founder of DecisionVu. “They tell you whether you did better or worse—whether you should be happy or sad. But they don’t give you the insight as to ‘Why?’” FP&A aims to provide that insight.
- Intellectual curiosity. To be successful in FP&A, professionals need to ask questions that can reveal what is behind the numbers or the situation. “They need the ability to understand the implications from details and see the picture that’s emerges—i.e., is there a direction or a pattern that can help you infer some insight into the organization? That’s a different mindset than worrying about things being properly controlled,” Maisel points out.
- Ambiguity vs. certainty. “FP&A professionals need to deal with ambiguity, whereas accounting professionals are trained to eliminate uncertainty,” Axson says. “The key is to know when the forecast no longer makes sense and adapt.” Russell adds: “In accounting, you’re trained for accuracy and being 100 percent perfect. The more successful FP&A professionals are the ones who shed that aspect and don’t worry too much about small inconsistencies in data.”
- Building a business partnership. According to Jason Logman, principal of Digital Enterprise Analytics at The Hackett Group, in FP&A, “You need to understand the business drivers. Your true value is aligning yourself with the business perspective.”
- Speaking to different audiences. The two functions serve different constituents. Accountants provide information to management but also reports to shareholders, creditors, and regulators. FP&A serves management and business leaders. While they both report, the format for accounting is standardized and must comply with set rules. FP&A can create reports that suit management, lead to actionable results, and rely on visualizations and dashboards, according to Maisel. “While FP&A can talk about the future, when accountants make projections they do so within a defined set of protocols,” he says. “They can’t talk about ‘alternative outcomes.’”
- Influencing skills. “An FP&A professional needs to have the ability to sit across the table from a marketing or operations executive and align himself or herself with those individuals’ interests,” Logman explains. “The challenge for FP&A is how to better lead and influence, how to talk about the business, and how to better relate and connect with the business partners.”
According to Michael Trzupek, group vice president of finance at Providence-St. Joseph’s Health, finance professionals have to develop influencing skills earlier in their careers than do accounting professionals. “In FP&A and finance, you work with business leaders throughout the organization, and you have to look at the world through their eyes and adapt to that,” he says. “You need to understand that you must approach each leader in a different way.”
It should be emphasized that while each area requires different skill sets, accounting professionals bring a great deal to the table. “Accountants have detailed knowledge of the company’s financial systems, which often translates into the inside track on how and where to dig into details, as well as nuances in the data itself,” says Gaileon Thompson, CTP, FP&A, senior vice president of business planning and analysis at Citibank Global Consumer Technology. “Both accountants and FP&A professionals need a strong understanding of financial and accounting principles, impeccable ethics, and a willingness to dive into the details.”
For additional insights and to learn how you can make the transition, the FP&A Guide, Orchestrating a Mind Shift: The Transition from Accounting to FP&A, is available for a limited time to registered users of the AFP website (download here).