2 tips to add value in 2023

There are 2 types of FP&A Managers:

1. Those who watch results play out

2. Those who influence the results

Shifting from one to the other isn’t a big effort. Making a few small adjustments can ensure you are adding value to your company on a monthly basis.

Here’s a few tips to influence the results:

Measure against the strategic plan

Remember that plan you helped put together in July-November?

The one you toiled over, but nobody has talked about since?

Believe it or not, all that effort was for a purpose. Your CEO is expecting the company to execute on that plan.

Create a simple scorecard to measure progress against the plan.

Show this scorecard at every monthly results meeting. Make it the center of conversation.

Green is anything above goal. Yellow is anything within 5% of goal. Red is anything below 5% of goal.

When the business tries to get you to stop showing it because ‘it’s not relevant anymore’, take note of their specific concerns, but don’t stop showing it.

What gets measured gets done.

Study the outliers

In FP&A we plan and analyze the averages:

• Average Net Promoter Score

• Average Revenue per Customer

• Average Days Receivable

• Average Lifetime Value

But the gold is in the outliers. Here’s an example of how to use outlier customer analysis to add value:

1. Rank your customers in terms of revenue, profit, growth rate, LTV, cost to service, or whatever relevant measure fits.

2. Then segment them into 3 equal sized categories: A-players (best performing), B-players, and C-players (worst performing).

3. Tell your marketing team to find more A-players while raising prices on the C-players.

This trick works for customer data, sales data, expense data, vendor data, etc.

In Summary:

Being a value-added FP&A Manager requires a few small adjustments.

Use your strategic plan to hold the company accountable to their commitments. Then spend time studying your customer data for outliers.

How do you plan to take action on this?

See you next Saturday.