FP&A Best Practices for Success

In this article we discuss:

• The Role of FP&A in Modern Business
• Key FP&A Best Practices for Success
• Elevating FP&A to a Strategic Partner

Financial planning and analysis (FP&A) plays a more central role in business strategy than ever before. But it’s not just because companies need better numbers. They need better conversations about where to invest, when to shift course, and how to balance growth with financial discipline.

Today’s FP&A teams work across departments to connect plans to action. They help the wider business understand what’s possible (and what’s not) before decisions are made. They combine strong fundamentals—forecasting, budgeting, analyzing performance—with a deeper, more strategic role in guiding outcomes.

FP&A best practices have evolved to meet these elevated expectations. For finance leaders, understanding the role FP&A plays today—and where it can have the most impact—is the first step to building a more connected and high-performing function.

The Role of FP&A in Modern Business

Modern FP&A ensures that financial plans stay tightly aligned with operational goals. Beyond a function that reports results after the fact, it’s now part of how companies plan, execute, and adjust in real time.

When it’s working well, FP&A acts as an early warning system, a strategic sounding board, and a bridge between long-term vision and daily execution. It helps leaders stay focused on their goals and see clearly whether they’re making real progress.

Today’s FP&A teams serve as active advisors to executive leadership, with responsibilities that span:

• Forecasting performance: Delivering updated projections that incorporate both financial and operational data.
• Supporting decision-making: Providing scenario analysis and clear narratives around trade-offs and opportunities.
• Resource stewardship: Ensuring capital and operating expenses are allocated to the highest-impact initiatives.
• Identifying growth levers and risks: Modeling what-if scenarios to surface opportunities and mitigate threats.
• Aligning strategy and execution: Translating corporate goals into practical, measurable financial plans.

Companies that embrace these capabilities at the highest levels are experiencing significant competitive advantages. According to McKinsey, organizations where FP&A influences C-suite decisions are nearly two times more likely to outperform peers on revenue growth and capital returns.

Key FP&A Best Practices for Success

Shifting FP&A from a reporting function to a strategic one takes deliberate change in how teams manage data, build forecasts, collaborate with other departments, and deliver insights. These best practices can help FP&A teams successfully make the transition and deliver higher impact.

Establish a Unified Data Environment

Better data connections don’t just make reporting faster; they directly impact the quality of financial planning, forecasting, and decision support. In fact, many of the top operational capabilities that finance leaders say they need most—like connecting data to outcomes, running faster planning cycles, and reorganizing quickly around new initiatives—are all areas where FP&A plays a critical role. 

To create a unified, single source for data, companies need cloud-based financial management platforms that connect finance, HR, and operational data in real time. The right tools make it possible for FP&A teams to plan continuously, adapt quickly, drive cross-functional collaboration, and deliver insights the business can confidently act on.

Adopt Rolling Forecasts

Static budgets can’t keep pace with how quickly markets and priorities shift. Frequently-updated rolling forecasts give leaders a continuous high-level view of expected performance and allow faster reallocation of resources when assumptions change.

Companies that rely on rolling 12-month forecasts can update their projections more quickly—and with greater accuracy—than those using traditional quarterly methods. In fact, nearly half of rolling forecasts are accurate within 5% of actual earnings, compared to just 35% for companies that forecast four times a year

Implement Driver-Based Planning

Driver-based planning focuses forecasts around the variables that actually move business results—like sales pipeline growth, pricing changes, cash flow or headcount shifts—instead of building line-item budgets. Teams identify their biggest levers, model how changes ripple through the business, then build FP&A processes around those relationships. This speeds up planning and makes forecasts more responsive to operational realities.

Embed Scenario Planning

Waiting for a single forecast to hold true is a risky way to operate. Leading financial analysts model different scenarios—upside, base case, downside—so leaders can understand how sensitive plans are to key assumptions. Good scenario planning is more than just a theoretical exercise; it’s tied to real decisions, like setting hiring targets or adjusting sales strategies based on likely outcomes.

Partner Early and Often With the Business

It’s easier to influence decisions before they’re made than to fix plans afterward. Strategic FP&A professionals get involved early—joining operational reviews, working alongside sales, marketing, HR, and product teams, and embedding financial considerations directly into strategic discussions. True partnership means finance isn't just responding to decisions, but helping shape them alongside internal experts.

Prioritize Insights Over Reports

Effective FP&A teams focus on what business leaders actually need to know. Rather than just reporting what happened, they use analytics to explain why it happened, what it means, and what options leaders have going forward.

For example: Instead of simply noting a revenue shortfall, an FP&A team may identify that most of the gap came from delayed deals in a specific region—and recommend pipeline adjustments or targeted marketing support. Advising in this way turns FP&A into a true decision support function.

Use AI Technology to Automate Low-Value Tasks

Despite the many finance technology tools now available, 34% of CFOs say they’re still dissatisfied with the number of administrative tasks their teams need to complete. That number drops among AI pioneers, and FP&A capabilities were identified as top transformational areas of AI and ML in the most recent Workday CFO AI Indicator Study.

FP&A teams must invest in tools with AI capabilities that can automate data aggregation, streamline report generation, and trigger alerts when key metrics move off track, freeing analysts to focus on higher-impact work.

Invest in Top FP&A Talent

Today's FP&A roles demand more than technical accounting skills. Finance teams need people who can think strategically, communicate clearly, and collaborate across the business. Building those capabilities means hiring for business acumen as much as financial expertise, and supporting ongoing skill development in areas like data analysis, scenario modeling, and executive storytelling.

Skills-based hiring approaches help fill these critical gaps, and in finance it’s gaining momentum. Workday research found that 57% of CFOs are prioritizing AI and ML skillsets when looking for new hires, and 41% are seeking analytics and data storytelling skills. They’re also investing in the tools their teams need to use these skills effectively: 99% say technology upgrades are necessary to attract and retain new talent in finance.

Benchmark and Measure FP&A Effectiveness

Leading FP&A teams measure their own performance—tracking KPIs like forecast accuracy, time-to-forecast, cycle times for budgets, and satisfaction scores from business partners. Regular benchmarking not only shows where FP&A adds the most value but also highlights areas for further improvement, making the team a model for continuous learning.

Elevating FP&A to a Strategic Partner

Today, strategic financial planning and analysis isn’t just informing the business—it’s a core part of how it works every day. It isn’t built through a single project or system upgrade. It’s built in the day-to-day work: how closely finance teams stay connected to operational decisions, how quickly forecasts adjust to changing assumptions, and how clearly insights tie back to the bottom line.

There’s no perfect model for getting this right. Every company has to find its own balance between discipline and flexibility. The best FP&A teams focus less on perfect finance models and more on making planning useful, giving leaders better ways to weigh options, manage risks, and move resources where they’ll have the greatest impact. 

Strengthening FP&A is less about doing more and more about doing the right things consistently. That’s what earns a real seat at the table—and keeps it.

Increasingly, CFOs are required to be strategic figureheads for their organizations. Learn how the FAME framework can help you achieve your business goals, with case studies from two enterprise-level organizations.