FP&A Team, Structure, Roles, and Responsibilities
Companies often underinvest in FP&A because they view it as a function for back-office scorekeeping. But you have the potential to drive strategic value for the business if you assemble your FP&A team effectively. Learn how to build an FP&A team from first hire to IPO and how to set it up for success as a true partner to the business.
Expectations for FP&A teams have changed significantly in the last five or ten years. While the responsibilities are largely the same, you’re now expected to run planning cycles and execute analyses faster and more proactively than ever before — without just adding more headcount.
That’s easier said than done when so many responsibilities fall on an FP&A team’s shoulders. Day to day and month to month, you could be working on anything from building and maintaining the operating model to preparing board materials, guiding planning and budgeting processes, running ad hoc analysis for strategic initiatives, mapping out growth scenarios, and more.
The name of the game for FP&A teams is efficiency. Here’s everything you need to know about structuring your team to be as lean as possible while also elevating your status from back-office scorekeepers to valued strategic business partners.
FP&A Roles and Skills
The general structure of an FP&A team is fairly simple despite the many unique workflows and processes you have to manage. At the earliest stages, you’ll likely have a Head/Director/VP of Finance who takes on the FP&A responsibilities. But as the team starts growing, you start to see a clearer split between accounting and FP&A.
Specific titles and hierarchies in FP&A will likely vary from company to company. But for the most part, there are three primary job titles that make up an FP&A team — analyst, manager, and director/VP.
The Director of FP&A or VP of FP&A
Director of FP&A and VP of FP&A are typically roles you would see in more mature organizations, whether that means a high-growth company getting ready for an IPO or one that’s already operating on the public market.
This person reports directly to the CFO and is responsible for orchestrating the FP&A team’s resources to execute the forward-looking side of the finance function. Some of the core responsibilities of this senior management or executive role include:
- Building out consistent FP&A processes for financial reporting and financial modeling to maintain compliance and deliver guidance to investors
- Creating internal processes for short-term and long-term budgeting, financial forecasting, and strategic planning
- Assemble key insights and takeaways from financial reports and deliver recommendations to business unit leaders as well as executives
- Organize team and cross-functional resources to execute projects like international expansion analysis or pricing model changes
- Being the figure head for business partnership between the FP&A function and other departments, forging bonds that streamline ad hoc analysis and budgeting conversations
- Assessing the potential ROI of finance automation projects, conveying that value to senior executives, and working with the necessary stakeholders to implement new tools
While financial modeling and analysis skills are a must, it’s the soft skills that often set a Director/VP of FP&A apart from the crowd. The relationships this person builds with partners across the business make all the difference in building strategic value from the finance side of the company.
The FP&A Manager
Another role you’ll typically find in more corporate FP&A organizations, the FP&A manager may carry out many of the business partnership responsibilities of the Director/VP of FP&A, but with a more granular, department-specific focus. In many cases, you’ll see these roles specialized for different business units. Some of their core responsibilities include:
- Assisting the head of FP&A and CFO with planning cycles
- Digging into financial and operational data to understand performance and surface key insights to senior leadership
- Building FP&A models that project the impact of strategic decisions and projects the business is proposing
- Translating financial data into insights that will help departmental leaders make more strategic decisions
- Analyzing performance to plan and budget variance to keep financial reporting on track
The Financial Analyst
Among the three general roles on an FP&A team, the financial analyst is the most universal across maturity stages. In many cases, a financial analyst will be the first hire an initial finance leader makes to assist with some of the critical FP&A work that drives growth. The financial analyst will be the most “in the weeds” among the three roles we’re listing. Some of their responsibilities include:
- Aggregating financial and operational data from core source systems, cleansing it, and preparing it for reporting processes
- Measuring critical financial metrics at the company-wide level as well as the department-level to drive more strategic analysis
- Running budget variance analysis as the books close to regularly report on performance to plan
- Preparing data for ad hoc analysis requests from senior leadership or executives
Compared to more senior roles where you expect technical skills and focus more on candidates with the necessary soft skills, hiring analysts is all about modeling and analysis capabilities. You want the highly-motivated Excel masters who have a mind for spotting trends in data and uncovering strategic insights in the numbers.
How to Build an FP&A Team for Your SaaS Business
Think about building your FP&A team as a four-stage process, starting from the company’s first finance hire to its life on the public markets.
You’ll have to operate with a lean team regardless of stage. But with the right approach, you can assemble a team that scales beyond its headcount and elevates finance’s strategic position in the organization.
Stage 1: The First Finance Hire
There are two approaches a company will generally take with its first finance hire. They could hire a former Big 4 accountant or a controller to bring bookkeeping in-house and lock down the accounting side of the finance function. In this case, they might need to lean on a fractional CFO to fill gaps on the FP&A side while the initial hire gets up to speed.
Or, they could hire a former investment banker or experienced VP of Finance to build the function out. These are effectively the first FP&A hires in the business who will focus their early efforts on building the first operating model.
At this stage, the first finance hire is responsible for every aspect of FP&A, which is why building that operating model is so crucial as a first step. According to Kalor Lewis, VP of Finance at Fivetran, it’s one of the hardest parts of early-stage FP&A.
The hardest thing about the early stage is that building an effective financial model requires a really strong bottom-up understanding of the business… You need to know what the sales capacity model looks like, how the marketing team spends its budget, and how the company makes money. Getting that understanding requires deep collaboration with leaders across the company.
If the initial finance leader doesn’t have an accounting background, it’s common for their first new hire to be a controller who can get the books under control. But after that, FP&A analyst is the most common next step — someone who can get into the weeds of analysis, planning, and modeling so the senior finance leader can maintain a global perspective of the business.
Stage 2: The Generalist Phase
Finance typically remains about 2 to 3% of total headcount as a company scales, so it may take until the 250-400 employee mark for the team to get large enough to have multiple FP&A roles staffed. But once you reach the stage where you’re ready to build out the FP&A team, you have to consider what your approach will be.
If you want this early FP&A team to deliver the most value to the business, consider taking the approach that Ajay Vashee took at Dropbox. He thought of FP&A in terms of strategic finance and focused on hiring generalists to carry out the vision in the leanest way possible.
First and foremost, strategic finance was a philosophy that we wanted to bring to the broader finance organization at Dropbox. Initially, it was the label we gave to a small team of high-horsepower, highly-analytical generalists that helped get that philosophy off the ground. From there, we scaled the rest of the organization through a strategic lens.
Building your FP&A team with generalists first means you can rely on the team to take on projects ranging from complex ad hoc analysis for board meetings to real estate deals, SaaS pricing strategy changes, and global expansion. It’s not until later that you’ll want to focus on specializing the FP&A roles.
Stage 3: The Specialist Phase
As the business gets more complex, you may outgrow the generalist approach to FP&A team building. Maybe you’re starting to expand your product lines and you go from one revenue source to a few. Or maybe you went from one central office to offices in multiple countries around the world. These are some of the situations where hiring specialized FP&A roles could make sense.
This is the approach Russ Jones took as the CFO of Shopify. As the company expanded with Shopify Payments and Shopify Capital, he started thinking beyond the generalists.
As you create new product areas or expand the business unit structure, I always like the model where there’s an FP&A person in a one-on-one relationship with each business area. And those individuals really have to view themselves as a mini CFO or COO for that particular area.
In terms of the three tiers of FP&A roles we explained earlier, this may be the stage where you start hiring FP&A managers. You could bring on FP&A managers who specialize in different business units, giving each functional area of the business a dedicated resource for ad hoc analysis and strategic planning.
Stage 4: The IPO and Beyond Phase
The last stage of building an FP&A team comes when you’re ready to make the transition from operating as a private company to a public one. The IPO process can be a difficult time for any company without guidance from those who have done it before, which is why this is when you should consider bringing a VP of FP&A into the fold.
That’s the approach Ajay Vashee took when Dropbox was ready to sprint through an 18-month IPO process. He said that he hired Eileen Tobias for her 12 years of FP&A leadership experience at NetSuite and her deep operational expertise in business software. With her in the VP of FP&A role, Dropbox was able to get its financial reporting and forecasting processes into the beat-and-raise cadence necessary in the public markets.
Empower Your Financial Planning and Analysis Team to Scale Efficiently and Deliver Strategic Value
The easiest way to waste any investments into your FP&A team is to sink 80% of its time into data aggregation, manual reconciliation, and constant spreadsheet wrangling.
Don’t limit the strategic value of FP&A professionals by forcing them to operate with core systems that don’t talk to each other. The sooner you prioritize systems integration and an intentional data architecture that brings all financial and operational information together, the better off every new FP&A hire will be.
We built Mosaic to solve this problem for FP&A teams and finance functions at large. Mosaic is the connective tissue between all your business systems — the technology that enables you to analyze and plan your way through any problem the company faces. When you arm your FP&A team with a Strategic Finance Platform, you’re giving them the power to be the proactive partner businesses now expect from the finance function.
Reduce your reliance on disconnected, error-prone spreadsheets. Centralize the financial data that lives across your many disparate source systems. And give your FP&A team the automated tools for digging into the “why” behind the numbers while planning based on real-time actuals.
FP&A Team FAQs
How are FP&A teams structured?
The structure of an FP&A team depends on the maturity of a business. At the earliest stages, an initial VP of Finance may take on the role before bringing on FP&A analysts to assist. As the company matures, the team can go from a group of analytical generalists reporting to the VP of Finance to specialized FP&A managers focused on different business units to, finally, a hierarchy of FP&A analysts reporting to specialized FP&A managers who all report to a VP of FP&A.