What is FP&A software? [A Beginner’s Guide]

In this guide, we are going to discuss financial planning and analysis, and how it can be supported with digital financial planning and analysis software – keep reading to learn more.

What is FP&A?

FP&A stands for financial planning and analysis, which covers many financial processes that the office of the CFO may undertake, such as forecasting, budgeting, scenario planning, and other analytical activities.
Accounting and FP&A functions have slightly different purposes. While accounting is a supporting function to provide accurate financial data, FP&A is about analyzing this financial data and using it to look forward, plan, and forecast strategically.
In the modern world, the responsibilities of the office of the CFO are changing, moving from simply managing financial data to analyzing data to inform wider corporate strategy.

Financial Planning and Analysis can help:

• Forecast how certain decisions may play out financially in the future
• Analyze historical budgets and financial performance to inform future budgets, plans, and forecasts
• Utilize scenario planning for risk management
• Inform corporate strategy with financial reports and data
• Identify areas that are performing well financially and those that aren’t
• Utilize an integrated data model to quickly generate reports on finances for other departments and teams
• Use forecasts and scenario planning to build organizational resilience and react quickly to market disruptions.

What is FP&A software?

For FP&A processes to be optimal they need software and computing power to manage the financial data load that enterprises of all sizes must manage. Financial planning and analysis is tough with manual legacy systems, even on-premises systems, but requires modern SaaS solutions for teams to manage the requisite workload.
As technology has changed over the years new tools have arisen to help financial teams manage and analyze their financial data, such as integrated ERP suites, placing less reliance on legacy systems like siloed Excel spreadsheets.
As Cloud FP&A software creates precedents for standard planning processes, those who don’t digitally transform can become entrenched in data management issues while those who embrace modern solutions race ahead.

Why legacy systems prevent FP&A

Even today, financial planning is still often carried out in spreadsheets, but this can bring its own problems.
Legacy systems rely on peer-to-peer sharing practices that aren’t just insecure and put financial data at risk, leading to inaccurate data from multiple financial professionals working on various versions of the same spreadsheet.
Moreover, financial teams spend lots of time on manual data entry, inhibiting their ability to use this time for FP&A processes such as forecasting and analysis. 
Often legacy spreadsheet systems will create data siloes that don’t take all of an organization’s data into context, such as HR data for workforce planning.
Fragmented data can atrophy finance teams from other key business functions, while data suggests the office of the CFO needs to be cross-functional with integrated data to help them become more of a trusted advisor.
With the pool of global qualified accountants shrinking in recent years, the modern talent that does exist will be trained on modern systems, and organizations that rely on legacy systems may struggle to attract new talent.
Even those using on-premises ERP may struggle with similar issues but notably will have scalability issues. When data management needs grow, as an organization grows in size, more hardware will be required, causing business disruption, time, and sustainability compliance.

Click to read FP&A product brochure gated

How Cloud-based integrated ERP can optimize FP&A processes

Firstly, integrating data across business functions will naturally lead to higher engagement and collaboration across teams. Data can be shared easily on the Cloud with confidence it is accurate and synced with the latest updates.
Utilizing automation in Cloud-based ERP and FP&A allows for advanced report generation, data can easily be taken from multiple business functions to create accurate and specific reports that can allow for succinct data analysis and additional processing such as forecasting and scenario planning.
Notably, as the Cloud can optimize the flow of data within an organization, this can ensure that hybrid working conditions are enabled and optimized. Finance professionals in multiple countries and time zones can work simultaneously on the same task without running into version history errors.
The financial complexity of international business can easily be resolved in the Cloud for the same reasons, whether that’s paying employees in their currency, and in compliance with their employment laws, can be easy, accurate, and with managed risk.
Moreover, businesses that want to deal with cash flow from multiple countries and subsidiaries will struggle with legacy systems while the Cloud can manage this complexity with ease and accuracy as well.
Automation can also increase the productivity of financial teams by reducing the burden of manual data entry and consolidation. Automation can accurately and quickly sort and consolidate data quickly, without getting tired or making errors. 
Financial professionals can use the time saved on value-adding tasks such as forecasting and scenario planning, which helps reduce the effects of the global shortage of qualified accountants.

Who can benefit from FP&A software?

FP&A software isn’t just something that is undertaken by large enterprises, rather organizations of all sizes can benefit from Cloud FP&A software.
Professional Service Firms– Professional service firms have large financial undertakings that other organizations may not, such as invoicing and procurement. With Cloud FP&A firms can easily consolidate their invoicing processes with automation, allowing their teams to focus on forecasting and building organizational resilience.
Nonprofit Organizations – Even charities and humanitarian organizations that don’t seek to make a profit, can benefit from integrated FP&A software. Being in control of their financial data can allow them to report to donors, investors, or regulators more accurately, and build transparent and strong relationships.
Control of financial data can allow charities to track donations from their starting point directly to where they make a difference in the real world. This can help make budgets and plans of action for the future.
Public Sector Organizations – By keeping on top of financial reporting, and compliance, and having advanced budget creation capabilities, the public sector can optimize service delivery while meeting historic demand. Automation can be key to reducing manual processes and enabling more strategic financial planning.

How Unit4 can provide an integrated FP&A solution 

Unit4 FP&A is a sophisticated financial planning and analysis software that helps unify an organization, freeing up time for high-value analysis. We integrate HCM, FP&A, and more, to create fit-for-purpose FP&A software that provides a modern solution to modern problems.

When compared to other vendors by Dresner, Unit4 FP&A was considered an ‘Overall Credibility Leader’ in the ‘Customer Experience Model’, and a ‘Trust Leader’ in the ‘Vendor Credibility Model’, maintaining a perfect 10.00 score for many other capabilities.
Want to hear more? Talk to sales today or consult any of our customer stories to hear how we helped other organizations implement the change they needed.

Frequently Asked Questions

What are the key responsibilities of FP&A teams?

FP&A teams are responsible for various financial processes including forecasting, budgeting, scenario planning, and financial analysis. Without modern FP&A software, finance teams generally can feel they are being asked to do much, especially with an increased need to forecast and strategize.

How do legacy systems impact FP&A processes?

Legacy systems, such as Excel, can hinder FP&A processes by creating data silos, leading to inaccurate data and time-consuming manual data entry. These systems are insecure, can result in fragmented data, and often require significant time to generate reports, reducing efficiency and collaboration.

What advantages does the Cloud offer for FP&A?

Cloud-based ERP systems help optimize FP&A by integrating data across business functions, enabling higher engagement and collaboration. They allow for accurate, 24/7 data sharing, support hybrid working conditions, manage financial complexities in international business, and increase productivity through automation.

Who can benefit from FP&A software?

FP&A software is beneficial for organizations of all sizes and industries, including:

• Professional Service Firms: Simplifies invoicing and procurement processes, allowing focus on forecasting and resilience building.
• Nonprofit Organizations: Enhances financial reporting, transparency, and strategic planning.
• Public Sector Organizations: Optimizes service delivery, ensures compliance, and improves budget creation capabilities.