Who is the FP&A Analyst?
FP&A Analyst (Financial Planning and Analysis Analyst) plays a big part in analyzing the financial of corporate industry in various ways by helping the upper management of the corporate industry in making strategic or financial or another decision making i.e., financial budgeting, forecasting the future cash flow, variance analysis at regular period, etc.
Working in Financial Planning & Analysis
FP&A is a different team formed within a corporate entity which is in linked with top management, treasury department, and other departments to create and project the cash flow and profit and loss statement for the board of directors or the top-level management for strategic decision making and for an effective decision regarding the effectiveness of business by improving the cost of operations. This also used for showing and presenting the financials and growth of the corporation with the potential investor as well as the shareholders.
Responsibilities of FP&A Analyst
There are lots of responsibilities that are taken over by a financial analyst, and some of them are as follows:
- Collection and record of the relevant historical data for the analysis purpose, which might have an impact on the financials of the corporate entity.
- Management of database that contains financial records and statements.
- Understanding and keeping track of all the major effects of the micro and macro environment economy on the corporate entity.
- Maximizing the effectiveness of cost of operation by analyzing the practice of the business and business delivery with that of market demands.
- Creating and preparing detailed financial reports and models for analysis by top management of the company as well as the potential investors etc.
FP&A Analyst Skills
For being a Financial Planning and Analysis Analyst, the following skills are required
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- Analytical Intellect: The person should be familiar and tactical in analyzing the historical data of the relevant field and the financial impact of the same over the industry, which includes the data analysis and financial analysis skills altogether.
- Financial Modelling or Representation Skill: The analyst should be able to represent the analyzed data into a simple model or project presentation like ratio analysis etc.
- Should Have Fair Presenting and Marketing Skills: The analyst should be able to sell his analysis to the top-level management of the corporate industry like CFO or directors etc.
- Should Have Knowledge and Practice Over Excel and Other ERP Software: The analyst should have good knowledge of excel and fair skill over the ERP and other customized software used for keeping the books of accounts of the relevant corporate industry.
- Should have the skill of strategic decision making and should have proper knowledge of the practice of the corporate industry.
- Should have good skills of maths as well as attentiveness so as not to miss even tiny transactions that may influence the result presented by the analyst to the board of directors.
Salary of FP&A Analyst
The salary and the bonuses paid to an FP&A Analyst majorly depend upon the size of the corporate entity as the large companies making good profit usually pay more than that of a smaller company. But generally, as per the experience and expertise of the FP&A Analyst that he introduces into the corporate entity, he joined determined his pay-out. In normal circumstances, the salary of a beginner analyst varies around $45K to $50K annually, whereas any senior analyst can make around $95K to $100K annually. Depending upon the position that he is offered he may even be able to make it to six-figure annually, i.e., at the position of a CFO (chief financial officer), Manager or at a position of a director of a big multi-national company can enable FP&A Analyst to earn up to six or seven-figure money annually.
FP&A Analyst: Entry Level
After the qualification, an aspirant can join as a junior analyst either in a firm or in the corporate industry, and depending upon the same; the analyst grows into his profession. In the case of Investment banking and other capital market field, the analyst can expect to grow with the experience while attaining higher responsible positions. The analyst can achieve a senior financial analyst in a span of 3 to 5 Years and could achieve a level of Analyst Manager or soon can achieve a position of director within the corporate entity. In some other field of work, there is a high probability that a newly joined analyst may remain posted to the same position for a longer period of time.
FP&A Analyst: Exit Strategy
Some of the analysts work in the same corporate industry and might be working on the same position in the industry. But most of them, after a span of 3 to 5 years they start to grow and may end up in the position of Analyst Manager, COO, CFO, etc. and may also reach a level of director of the corporate industry. Some of the analysts may end up on their own practice by becoming a consultant for the clients and may create their firms and carry on their profession.
Conclusion
A corporate financial analyst works closely with the executive teams and helps in strategic decision making for the board of directors, CFO & CEO, etc. Thus the analyst plays a key role by analyzing the various parts of the corporate industry for projecting the future financials as well as cash flow of the business industry and hence receive healthier remuneration. The right knowledge, time utilization, and the customer can land the analyst in a very profitable business and success in the future.
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