Financial planning and analysis (FP&A) capabilities have grown much more sophisticated in recent years. Chief financial officers (CFOs) expect these advances to continue during the next 12 months as a related trend – the active involvement in FP&A by other business groups – also accelerates. These developments help explain why financial planning and profitability analysis and reporting rates as a top priority in Protiviti’s latest annual survey of global CFOs and finance leaders.  

The importance of FP&A and its close relative, business planning and analysis (BP&A), are quickly spreading throughout the enterprise. This adoption is occurring at the behest of boards and C-suite leaders who want supply chain leaders, chief human resources officers (CHROs), chief marketing officers, heads of ESG/sustainability and other organizational leaders to produce more, and increasingly forward-looking, financial and nonfinancial data analytics. This push places new demands on CFOs while creating new opportunities for finance groups to strengthen their FP&A capabilities.  

CFOs are working with business leaders throughout the organization to help establish the relevance, accuracy and security of the data used in their planning and analysis activities. Since much of this data is nonfinancial and unstructured, it is crucial for finance leaders to ensure that the data and related analyses are subjected to sophisticated controls, accuracy assurance, and data governance that adheres to internal policies, and measured against regulatory requirements and changing stakeholder expectations (e.g., evolving sentiments regarding data privacy).  

As new analytics from the rest of the business emerge and mature, finance groups can strengthen their revenue, profitability and cash flow forecasts by integrating new “beyond finance” data points and KPIs into their analyses.  

For example, leading CFOs are working with chief operating officers to develop a total-cost-of-ownership perspective on sourcing investments that shape new supplier selection and management strategies. Finance leaders are also helping their supply chain colleagues develop metrics that provide more predictive snapshots of suppliers’ reliability and quality, risk management capabilities, and capacity for innovation. CHROs need help from CFOs to generate real-time insights about the skills that reside throughout the organization; these analytics strengthen talent forecasting and scenario-planning activities. 

ESG teams rely on the finance group’s guidance on accessing and analyzing relevant, high-quality, audit-ready data in accordance with organizational data governance standards as well as increasing stakeholder demands and new disclosure rules. In addition to taking charge of ESG data management and reporting, CFOs help ESG leaders with developing sustainability metrics that monitor ESG performance and identify operational-improvement opportunities (e.g., reducing distribution and delivery costs).  

As FP&A becomes more widespread throughout the enterprise, CFOs are keeping the following in mind:  

• Shareholders want more expansive and sophisticated FP&A outputs. In our survey, CFOs in publicly held companies rate FP&A as a notably higher priority (69%) compared to finance leaders in private companies and the public sector.  

• Better business analyses translate to more powerful finance analytics. The data collected and analyzed by functional and operational teams can be used to run more precise and forward-looking financial forecasts and analyses.  

• Technology enablement is crucial – especially on the AI front. A fully optimized FP&A capability leverages integrated and flexible self-service tools that facilitate real-time collaboration and digital on-demand planning. More CFOs are deploying AI to support a range of planning and forecasting activities throughout the order-to-cash cycle to deliver major cash flow management improvements. 

 Among those finance organizations that use generative AI, 58% report that they have achieved meaningful and measurable progress in their cost optimization efforts. Some of the most impressive AI use cases give finance groups deeper understandings of customer behaviors. By leveraging AI to analyze payment behaviors (when and how customers pay, and even the spirit in which they pay), finance and accounting teams can adjust customer-onboarding processes, collection activities and other accounts receivable activities to increase cash flow.  

Interested in learning more? Read TRANSFORM: Assessing CFO and finance leader perspectives and priorities for the coming year, at www.protiviti.com/financesurvey.