FP&A success rests on three foundations: accounting to understand historical numbers, statistics to work with large datasets, and finance theory like NPV and IRR. Banking especially demands strong finance theory skills.
In FP&A, there's a few like core skills that I'd say are very helpful in baking especially. One would be some accounting knowledge. And that's true across the board. Right. The more you understand the historical accounting numbers, the better you'll be at forecasting them in the future. So that's a basic principle. Another one would then be data. We often have to deal with very large data sets, whether it's, you know, customer data or economic data. Being adept at using your statistics, running regressions, understanding quality of data and how to clean it if it's not good, all of those things so that you're getting good data and analysis. And I'll put all of that into probably a statistics category. So accounting would be one, statistics another. And then finance is another category. And I separate that from accounting because what I mean by finance is like finance theory, things like time value of money, duration of assets and liabilities, MPVs and IRR CLCs and things. Sure. You know, we take corporate finance in school and we hear these ideas, but a lot of us maybe aren't using much in our day to day and especially for a lot of income statement focused bank or other companies, they might not be as heavy end of that sort of analysis. But in banking you are so really understanding the time value of money and those ideas and how they apply to your bank. That's critical. So if that's someone starting out their career or if you're still a student, make sure you get a good grounding in all of those disciplines that would lay the groundwork.
Trust and Leadership Lessons for FP&A From 100+ Top Leaders with CFO Jon Laudie
