Gross Margin Forecasting: Revenue Can Be Right and the Economics Still Be Wrong
A practical FP&A guide to gross margin forecasting through mix, pricing, delivery cost, capacity and the operating assumptions behind the percentage.
Forecast Assumptions: The Model Should Remember What Changed
A practical FP&A approach to forecast assumptions, assumption logs, ownership and forecast-to-forecast bridges so Finance can explain why the outlook moved.
Working Capital Forecasting: Why the P&L Can Be Right and Cash Still Be Wrong
A practical FP&A guide to forecasting accounts receivable, accounts payable and inventory so the P&L and cash outlook tell the same story.
Operating Expense Forecasting: Stop Treating Every Cost the Same
A practical FP&A approach to operating expense forecasting: match the method to how each cost actually behaves instead of applying one assumption to every line.
Month-End Close and FP&A: When Are the Actuals Actually Ready?
The books can be closed before the actuals are ready for FP&A. A practical look at the Accounting-to-FP&A handoff, reconciliation and decision-ready actuals.
Ad Hoc Reporting in FP&A: When the Same Quick Question Keeps Coming Back
Repeated ad hoc reporting requests are often a signal that regular FP&A reporting is not answering management’s real questions. Here’s how to use that signal.
Headcount Forecasting: Why Approved Hires Keep Breaking the Plan
A practical FP&A guide to headcount forecasting, hiring timing, vacancy assumptions, replacement hiring and connecting workforce plans to the financial forecast.
Management Reporting Pack: What CFOs Actually Need Every Month
A practical guide to building a monthly management reporting pack that explains what changed, updates the outlook, and helps CFOs make decisions.
Budget Variance Analysis: How FP&A Finds What Actually Matters
There is a particular kind of monthly Finance meeting where every variance gets treated like it has committed a crime. Travel is $8,000 over budget. Explain it. Software is $11,000 under. Explain it. Office supplies are $3,700 over. Apparently we need closure. Meanwhile, revenue is $2.4 million below plan and somehow we’ve allocated roughly the […]
FP&A Software vs. Excel: When Has Finance Actually Outgrown Spreadsheets?
I need to disclose something before we begin. I like Excel. A lot. I’ve spent enough of my career in Excel that I’m probably entitled to some kind of common-law marriage. So when somebody tells me Finance needs to “get out of spreadsheets,” I don’t immediately nod thoughtfully and start scheduling software demos. I usually […]
What Is FP&A? A Practical Guide to Financial Planning & Analysis
FP&A has a branding problem. Tell someone you work in Accounting and they have a general idea what you do. Tell them you’re in Sales and they definitely have an idea what you do. Tell someone you work in Financial Planning & Analysis and there is usually a small pause. Then: “So…finance?” Yes. Technically. That […]
FP&A Software: When Does Your Finance Team Actually Need It?
I like software. I also like buying things. Amazon has documented this extensively. So you might assume I’d be very supportive when someone tells me their Finance team needs a new FP&A platform. Not necessarily. In fact, one of the first questions I’d ask is probably the least exciting one: What problem are you trying […]
Driver-Based Forecasting: How to Find the Right Business Drivers
I get suspicious when someone tells me they have 47 drivers in their forecast. At that point, I don’t think you have drivers. I think you have a very complicated spreadsheet. There is a difference. Driver-based forecasting is one of those FP&A ideas that sounds almost impossible to disagree with. Instead of taking last year’s […]
Financial Forecasting Methods: How to Choose the Right One
I have never understood why companies spend enormous amounts of time building sophisticated forecasts and then use essentially the same forecasting method for everything in them. Revenue? Historical growth plus an adjustment. Travel? Historical growth plus an adjustment. Software? Historical growth plus an adjustment. Headcount? Last year plus the people we think we’re hiring. Coffee? […]
Financial Scenario Planning: How FP&A Can Build Scenarios That Actually Help Management
I have trust issues with scenario models. Not because I don’t like scenarios. I do. I’ve built plenty of them. I’ve also sat in meetings where we had so many scenarios that I started to suspect we were using Excel to avoid making a decision. You know the meeting I’m talking about. Base case. Upside […]
AI Agents in Finance: What Should CFOs Actually Let Them Do?
There is a meaningful difference between AI helping with Finance and AI doing Finance. We are crossing it. Until fairly recently, most of my conversations about AI in Finance sounded something like this: Can it write the variance commentary? Can it summarize this report? Can it help with the forecast? Can it analyze this file? […]
Building FP&A From Absolute Zero: Katelyn Stienen on Budgets, Business Partnership, and the Stories Behind the Numbers
What would you do if you walked into a five-year-old company with more than 170 legal entities, roughly 10,000 budget lines, no FP&A planning system, department heads who had never worked with a structured P&L, and tax rules capable of changing while you were still building the budget? I think I’d need coffee first. Probably […]
How to Measure AI ROI: A Practical Guide for CFOs and Finance Teams
Every company seems to be saving thousands of hours with AI. I would like to know where everyone is keeping them. Because apparently AI wrote the email, summarized the meeting, analyzed the data, drafted the presentation and saved Brenda six hours on Tuesday. Fantastic. What happened Wednesday? I ask because companies are getting very good […]
AI in FP&A: Can You Trust an AI-Generated Financial Forecast?
I wouldn’t have written this article a few years ago. Mostly because nobody was asking me whether I trusted the financial forecast built by a robot. Finance has changed. Now AI can analyze historical results, identify patterns, generate baseline forecasts, flag anomalies, help build scenarios and explain variances. Some newer systems are moving toward something […]
FP&A Team Structure: Who Should You Hire and When?
If you’re building an FP&A team, I have one request. Please don’t start with the org chart. I know it’s tempting. CFO at the top. VP of FP&A underneath. Director. Manager. Senior Analyst. Analyst. Look at that. We have a department. We haven’t figured out what any of these people are doing yet, but the […]
How to Build a Revenue Forecast That Doesn’t Start With Last Year + 10%
I have a complicated relationship with revenue growth percentages. Not because they’re useless. Because they have a tendency to arrive before the explanation. “Revenue grows 10% next year.” Okay. Why? “Well, we grew about 10% this year.” That is certainly information. It is not yet a revenue forecast. One of the easiest ways to build […]
Rolling Forecast: What It Is, How It Works, and When to Use One
I have never understood why December 31 gets so much authority over financial planning. Apparently the calendar changes and Finance is supposed to lose interest in what happens next. It’s October. We have a three-month forecast remaining. Very useful. Management is making hiring decisions that will affect next summer, Sales is talking about deals that […]
When Does a Company Need FP&A? 11 Signs You’ve Outgrown Basic Finance
I don’t think a company wakes up one morning and suddenly needs FP&A. There usually isn’t a ceremony. Nobody cuts a ribbon. What happens instead is that the CEO asks a question that used to take ten minutes to answer, and three days later Finance is still working on it. Someone wants to know what […]
Budget vs. Forecast: What’s the Difference and When Should You Use Each?
I can usually tell when a company has confused its budget with its forecast. It’s September. The business has changed. Sales are running below plan. Hiring moved. A product launch slipped. A large customer expanded unexpectedly. Marketing changed its spending. And somehow the forecast still looks remarkably similar to the budget everyone approved nine months […]
What Does an FP&A Consultant Do? A Practical Guide
“FP&A consultant” is one of those job descriptions that can mean almost anything. Build a forecast. Fix a model. Help with the budget. Prepare something for the board. Figure out why margins are falling. Untangle a reporting process that apparently requires three people, six spreadsheets and one person who absolutely cannot take vacation. All technically […]
How to Review a Financial Model Before You Trust It
I don’t start reviewing a financial model with the formulas. This occasionally bothers people. They’ve spent a lot of time building those formulas. There may be nested IF statements. INDEX MATCH. XLOOKUP. Maybe something involving OFFSET that nobody wants to discuss. I’m sure it’s all very impressive. I want to know why revenue grows 12%. […]
13-Week Cash Flow Forecast: A Practical Step-by-Step Guide
There is something about cash that improves everyone’s interest in Finance. Revenue misses forecast? We should discuss it. Gross margin moves? Let’s understand the drivers. Cash gets tight? Suddenly the CFO, CEO, Controller, three department heads and someone who hasn’t spoken to Finance since the Christmas party would like an update. Preferably this afternoon. That’s […]
FP&A Forecasting Process: A Practical Step-by-Step Guide
I have a fairly simple test for a forecasting process. When the forecast changes, can anyone explain why? Not which cell changed. Not which department submitted a new number. Not that revenue is now $600,000 lower than it was three weeks ago. What changed in the business? That question sounds embarrassingly basic until you’ve sat […]
How to Build an FP&A Function From Scratch: A Practical Guide
I have a strong opinion about building an FP&A function from scratch: Don’t start by hiring FP&A people. I realize this is an inconvenient opening for an article about building an FP&A function. But I’ve seen companies decide they need FP&A and immediately jump to the org chart. We need a Director. Maybe two analysts. […]
How Past Experiences Help Us Learn New Things
I’ve noticed something slightly strange about the way I learn. Whenever someone explains something new to me, my brain immediately starts looking for something old. A person. A meeting. A mistake. A company I worked for. Something my mother said 25 years ago. A completely unrelated Tuesday in 2011. Anything, apparently, that will give the […]