What does FP&A do?

1) Budgeting and Forecasting

FP&A teams budget and forecast the company's financial plan. They analyze historical financials, real-time data, and economic trends to create realistic projections of future revenue, expenses, and profits.

FP&A analyzes financial performance month-to-month.

2) Variance Analysis

Focus: Analyze Performance 📊

Variance analysis shows where the company is over/underperforming.

FP&A teams compare the actual financial performance of the company to the projected figures, influencing the budget and operations.

3) Bookings-to-Revenue

Focus: Improve Sales Efficiency 🤝🏽

FP&A teams forecast the sales pipeline to help meet financial targets.

The FP&A team performs booking-to-revenue analysis for financial statements. This is important for subscription-based industries.

4) Customer Churn Analysis

Focus: Optimize Unit Economics 💵

FP&A analyzes customer churn to understand why customers stop using the product, an important metric for company profitability.

Example strategies to lower customer churn, like tweaking monetization features, investing in customer service, or loyalty programs.

Why? Reducing churn grows customer lifetime value.

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