The secret to a first-rate FP&A service is something you have easy control over: consistency.
When you’re building out your FP&A services and the deliverables included, it can start to feel transactional. They pay you and you provide the reports, dashboards, projections, and budgets that help them make educated decisions.
Thinking of FP&A as a set it and repeat it process is approaching the service all wrong. But if you set a consistent rhythm of touching base with clients and reiterating on your models, you’re setting yourself up for success. Here’s why.
Developing a relationship
The most important thing to remember about FP&A is that it’s not just a service, it’s a relationship.
Accountants are so used to thinking about deliverables. But FP&A is more than the reports and dashboards, it’s the conversations and shaping your service based on what you talk about.
Business owners aren’t always financial whizzes. If you’re focused on complicated models and forecasts, that information might go straight over their heads. Consistently setting time to talk about your work and what it means for them strengthens the relationship and guarantees you’re delivering the highest value service.
Identifying problems and correcting course
No one expects everything to go perfectly to plan. What matters is how you react to things going off track.
When you’re meeting consistently, you get an opportunity to review the results of your financial modeling. Any assumptions you made in the model are put to the test as you compare your forecasts with the actuals.
Say you made a forecast that assumed 5% growth in revenue month over month. All of your future planning hinges on this assumption. Then, in your regular meeting, you find out there were supply chain issues which resulted in higher costs, lower margins, and inventory shortages.
Such a severe disruption means changing your assumptions and, most importantly, changing your financial planning.
Focusing on what the client really wants
At the start of your engagement, you’ll ask about their goals and projections. What you learn through that conversation shapes the early days of your FP&A services.
Goals and projections change. Whether it’s a big disruption or a small adjustment, these changes need to be taken into account and you’ll only learn these things through regular check in’s.
Think about the last example where a client experiences supply chain issues. Their priorities could shift from maximizing sales to minimizing costs. The effect on their bottom line might be the exact same, but they’re very different paths to get there.
Remember to not always take your clients’ goals at face value. They might say they want to hit a specific amount of profit or to have more working capital, but if you dig deeper, there’s a “why” below that. You’ll start to learn the “why” that motivates their goals over time as their goals adjust and your services adapt.
Once you know the “why’s” that drive your client, you know exactly what your service should orbit around.
Constantly adjusting as you go
After some time has passed, you’ll have an initial projection and results. There’s going to be some differences between the two, so what now?
An integral skill in FP&A is flexibility and knowing how to adjust. Think of it as acting like a GPS. Is there an accident ahead or did a road unexpectedly close? It’s time for you to adjust the route.
A GPS works by constantly connecting to get updated information. You need to think of your role the same way. Regularly touching base will help you learn about potential disruptions or, if your client’s goals change, what the new destination is.
Start by reviewing their financial reporting and highlighting where there were variances. Then ask questions to better understand what was happening within the business. You’ll start to put together a picture of what happened and what needs to be adjusted.
Your regular touchpoints are when you should be focused on collaboration. Involve your client in the process, make them feel like they’re being heard, and let their input dictate every part of your service. A client that feels heard and in control is a happy client.
What it looks like in practice
At the start of your FP&A engagement, have that initial kick off conversation and then build the financial model. Most importantly, identify what the key drivers behind their financial performance are.
For example, a manufacturer cares deeply about their supply costs. Supply costs drive prices, margins, manufacturing count, and so much more. Drivers are exactly that, the factors that most influence the business’s choices and financial planning.
Then you need to set a cadence. How frequently you meet should reflect the business’s needs and context. A well-established business likely won’t need as many touchpoints as an early stage business where adapting to a constantly changing environment is key.
Every meeting, you complete similar steps. Have the conversation, ask about what might have changed starting with the drivers, and then adjust the models. Continue to get feedback and let that shape your services until they’re perfectly tailored for your client.
Once you have an established relationship and cadence, you become an integral part of the operations of your clients.
Getting into this cadence is impossible without a scalable technology solution, such as Jirav. Request a demo with our team today and find out how you can deliver beautiful reports, flexible plans and other advisory deliverables to your growing client book of business.