OnPlan FP&A

Link to the Free MIT Course “Statistical Thinking and Data Analysis

https://bit.ly/3ZtMkQL

Statistical Thinking and Data Analysis | Sloan School of Management | MIT OpenCourseWare This course is an introduction to statistical data analysis. Topics are chosen from applied probability, sampling, estimation, hypothesis testing, linear regression, analysis of variance, categorical data analysis, and nonparametric statistics.

When FP&A pros talk about variance, they’re also concerned about the distance between values from a central point. But rather than referring to a statistical measure across a sample or population, they’re talking about how far off financial KPIs are from what was expected.

Finance professionals draw up financial budgets and operating plans before a reporting period, usually a fiscal or calendar quarter or year. These budgets are forward-looking and typically fixed. As the period plays out, actual performance will vary compared to your projections because of changing economic conditions, accounting errors, or overly optimistic or pessimistic sales assumptions.

The difference between the planned and actual numbers is variance, and it’s crucial to minimize it, especially if you’re a startup or small business.

What are favorable and unfavorable variances?

A variance analysis can expose both favorable and unfavorable variances. When your company generates more revenue or incurs fewer costs than expected, it’s considered a favorable variance. Conversely, unfavorable variance happens when a company generates less revenue and incurs higher costs than the budgeted amount. However, this terminology can be a bit misleading.

Not all unfavorable variances are bad because spending more than planned in one area may create a favorable variance elsewhere.


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image by Annie Spratt

In the world of startups, you can tell just how important planning is by looking at those companies with no revenue and huge valuations – much of the company’s value comes from its projected future earnings.

FP&A is the process of determining how your company will afford to achieve its vision, strategic goals, and objectives. While accounting is about looking backwards, FP&A is about looking forward.

Building the financial talent you need in a startup or small company is a process. In a new venture, the FP&A function is often handled by the founders with outsourced assistance. The controller or CFO will often become in charge of FP&A next. As the company becomes larger, a dedicated FP&A team will likely be a valuable investment.

FP&A professionals are in essence storytellers. Using numbers as their language, they provide insights into the future by connecting the dots, thus unlocking value.

Photo by Brooke Cagle

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Excel and Google Sheets weren’t built specifically for financial forecasting and analytics, which is why it’s no wonder there are important drawbacks to using them for this purpose.

Five roadblocks you can expect to encounter when using either Excel or Google Sheets for forecasting:

1. Risk of errors with manual data entry
2. Difficulty collaborating with other departments
3. Limited features for protecting sensitive information, audit trails, and version control
4. Multiple spreadsheets to manage as the business scales
5. Inefficient and error-prone scenario building



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Startups that plan to grow should have dedicated FP&A professionals on their finance teams.

FP&A revolves around four pillars of activity:

1. Budgeting

2. Financial planning

3. Management and performance reporting

4. Forecasting and modeling

The role of FP&A professionals is to analyze the financial data revealed. Then, they provide actionable insights based on their findings.

Not every finance team has a dedicated FP&A role. However, as we’ll see, making FP&A a priority in your organization sooner rather than later will pay off.

This choice sets you up for success because early on in your company’s growth, this person will do the following:

- Help build your business plan

- Monitor performance vs budget

- Produce P&L and cash flow statements



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Intuit QuickBooks and OnPlan can help you gain transparency and improve your forecasting abilities.

Learn how in tomorrow's webinar: https://bit.ly/3UJhdOu

An Introductory Guide to a Great Rolling Forecast - OnPlan

An Introductory Guide to a Great Rolling Forecast - OnPlan A rolling forecast model is a powerful tool for FP&A teams. Here's everything you need to know about how to use it and a bonus free template.

Unleashing the strategic analyst in you with FP&A software

Unleashing the strategic analyst in you with FP&A software Strategic finance has often been slowed down by a lack of software integrations and team collaboration. Read on to learn how that's changed.

The most common myths about FP&A software – part 1 - Onplan

The most common myths about FP&A software – part 1 - Onplan A lot of CFOs or CEOs still have concerns about their readiness to adopt FP&A software. We want to address their concerns head on. Let’s go!

Sales Forecasting in Excel: How to Do It + Free Template Download

Sales Forecasting in Excel: How to Do It + Free Template Download Want to simplify Sales Forecasting in Excel? We'll teach you how, give you a free template, and suggest a way to make things even easier.

https://bit.ly/3Px8cEA 4 ways to improve the secret skill needed to be a CFO: storytelling

Storytelling: An Essential Skill Needed to be a CFO Storytelling is a key skill needed to be a CFO. This post breaks down four techniques you can use to become better at it.

https://bit.ly/3CauSHK Variance analysis is one of your most powerful tools. Here’s why.

Variance analysis: uncovering your strengths and weaknesses Find out how Variance Analytics can point out your operational strengths and weaknesses and help you improve your strategy.

https://bit.ly/3Ps5YGP Time to debunk another set of myths about FP&A software.

The most common myths about FP&A software – part 2 - Onplan Not sure you’re ready for FP&A software? Make sure you know the facts. Today, we'll debunk a second set of myths, about FP&A software capabilities.

https://bit.ly/3QyAAHo Meticulous accounting sets the foundation for making good decisions.

3 areas to focus on as a SaaS finance leader - Onplan The role of the finance leader in the SaaS space is to understand the financial impact of operational choices in three key areas.

https://bit.ly/3dlZxYv As the financial period progresses, management needs to understand how actual performance compares to what they assumed in the expense budget and revenue forecasts. The difference between these planned and actual numbers is variance..

Variance analysis: uncovering your strengths and weaknesses Find out how Variance Analytics can point out your operational strengths and weaknesses and help you improve your strategy.

The SaaS Magic Number can help you make sure your sales and marketing investments are appropriate relative to your sales growth. This is to ensure that you are neither overspending nor under-investing.

What does the SaaS magic number mean for business growth? - Onplan Calculate your SaaS magic number and determine the efficiency of sales & marketing spend relative to your growth how to improve.

When FP&A pros talk about variance, they’re also concerned about the distance between values from a central point, but rather than a statistical measure across a sample or population, they’re talking about how far off financial KPIs are from what was expected.

Variance analysis: uncovering your strengths and weaknesses Find out how Variance Analytics can point out your operational strengths and weaknesses and help you improve your strategy.

The stakeholders you need to engage with don’t all care about the same things or the same level of detail.

Storytelling: An Essential Skill Needed to be a CFO Storytelling is a key skill needed to be a CFO. This post breaks down four techniques you can use to become better at it.

It is common sense that if you track your sales growth, you’ll be able to track the growth of your company as well. That’s why sales managers and reps need to factor the sales KPI considerably

Sales Metrics and KPI: The Complete Guide - Onplan In our complete guide to 30 sales metrics, you'll learn how to track what truly matters to your business to consistently grow.

Preparing a cash flow is a complex process with a lot of moving parts that’s based on 7 fundamental steps

Five reasons accurate cash flow forecasting is so important - Onplan Accurate cash flow forecasting is essential. Here's how you can stay on top of your cash flow and make smarter strategic decisions.

https://bit.ly/3Jci8Sz Because there are strict rules about revenue accounting, revenue is the “gold standard” metric. Investors will put the most weight on it as your business matures.

Bookings vs billings vs revenue: What’s the difference? What's the difference between bookings vs billings vs revenue? Read on to find out and learn the importance of these three metrics.

Most FP&A teams still spend an absurd amount of time revising or updating models and checking or reconciling data.

The most common myths about FP&A software – part 1 - Onplan A lot of CFOs or CEOs still have concerns about their readiness to adopt FP&A software. We want to address their concerns head on. Let’s go!

A 12-month rolling forecast gives you insights well past the traditional annual budget time frame.

An Introductory Guide to a Great Rolling Forecast - OnPlan A rolling forecast model is a powerful tool for FP&A teams. Here's everything you need to know about how to use it and a bonus free template.

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Accurate cash flow forecasting is essential. Cash is king, especially in a small, fast-growing business that may not yet be profitable

Five reasons accurate cash flow forecasting is so important - Onplan Accurate cash flow forecasting is essential. Here's how you can stay on top of your cash flow and make smarter strategic decisions.

https://bit.ly/3yYiaZl Startups and seasoned businesses must measure metrics that determine the health of their business, but the Magic Number or any other metric in isolation cannot determine the overall health of your business.

Why the Magic Number of 1 is So Lonely - Onplan Read on to learn how to use the ‘Magic Number’, a SaaS metric that determines your efficiency in generating incremental recurring revenue.

Overoptimistic sales forecasts can mislead management into thinking that they are cash-rich while they are at risk of running out of funds. https://bit.ly/3AXZOup

Sales Forecasting in Excel: How to Do It + Free Template Download Want to simplify Sales Forecasting in Excel? We'll teach you how, give you a free template, and suggest a way to make things even easier.

The best FP&A leaders should always search for the truth rather than try to hide it, no matter how uncomfortable it gets. https://bit.ly/3B4hmoN

4 Essential FP&A Skills You Need on Your Team - Onplan Strategic thinking, storytelling, problem-solving, and objectivity are four soft skills that set aside the best FP&A analysists. Here's why.