As finance continues its evolution toward becoming the strategic heart of the business, CFOs are searching for top talent that can help them effectively plan for that future — such as the right person to lead critical teams like financial planning & analysis.

Requiring both data fluency and broader vision, it’s not an easy job. Those in the FP&A function “truly have to be the jack of all trades, be able to connect the dots between all the different functions within finance,” Cosmin Pitigoi, CFO of global payment provider Flywire said.

Prior to joining the Boston, Massachusetts-based Flywire as its finance chief in March, Pitigoi spent 11 years at PayPal in various roles — serving at the head of its FP&A function as its SVP, Global FP&A, operational finance and pricing, according to his LinkedIn profile.  

The FP&A team oversees some of the most essential processes in the finance function, including forecasting, scenario planning and other analytics that support strategic business decisions, according to an overview by Oracle. The FP&A team typically focuses on forward-looking projections, rather than backward-looking accounting or present cash management, and has only grown in importance over recent years. For CFOs who are now serving as key partners to the CEO when it comes to future planning and decisions, having a trusted FP&A leader in place is a must.  

The operational muscle

FP&A serves as a critical connection point to ensure business processes can be conducted speedily and effectively. Like the chief accounting officer and controller, FP&A leaders are an essential part of an effective finance team. While CAOs focus on areas surrounding financial systems and governance and controllers zero in on processes such as the quarterly close, FP&A leaders act as a bridge between finance and other key parts of the business.

Rather than an employee, for example, having to bring in someone from the analytics department, human resources or marketing department to answer one question, they can head to FP&A and see all of that data marshaled in one place, Pitigoi said in an interview. The FP&A team serves as “the operational muscle of the company,” he said.

Ensuring that muscle is working as intended means whoever is in charge of the FP&A function needs to be able to wear multiple hats with ease, and be able to draw different threads of data from throughout the business to present a clear, comprehensive tapestry to the CFO.

“A great FP&A person is somebody who has that mindset of, ‘I'm the right hand, let me be that for you and chase all those things down,’” Pitigoi said.

Other experts have referred to FP&A as a sort of “corporate octopus,” with its remit reaching into all parts of the business to consolidate the necessary data they need to provide key insights, according to a 2023 report by CFO Dive.

FP&A leaders can earn salaries on par with other top roles in the finance suite, with VPs or directors of FP&A logging salaries of around $200,000, according to a recent write up by FP&A software provider Cube. This compares to average salaries of around $238,200 for chief accounting officers, the second-highest role in the finance function behind the CFO, CFO Dive previously reported.

As technologies like artificial intelligence put a further premium on data-driven insights, the importance of FP&A leadership has only grown. A recent report by Gartner found 97% of finance chiefs agree that global FP&A has increased in scope over the past couple of years.

Those expanding responsibilities come as most CFOs — 84% — face a critical shortage of talent in their accounting and finance teams, according to a 2023 study by tax compliance software provider Avalara. Forty-nine percent of top financial leaders highlighted a lack of FP&A expertise throughout their finance function, according to the study, which surveyed leaders in both the U.S. and United Kingdom.

Pulling the plan together

A well-oiled FP&A team, complete with talented leadership, can also provide businesses with an edge over their competitors, Randeep Rathindran, VP and team leader for Gartner said.

“Normally if you ask companies, ‘what differentiates you? What's a source of advantage?’ They're going to say, ‘well, it's our products, it's our brand, it's our operational excellence. it's our cost leadership,” Rathindran said in an interview. “FP&A people are saying, well, the way you plan and the way you make decisions, that's as much a source of advantage as the company's brand.”

Over the past few years, many teams are creating a subgroup within FP&A that is a kind of “decision support group,” Rathindran said, providing critical aid to CFOs which are straddling the operational and financial needs of the business. In an environment where data-driven strategies can provide a key competitive advantage, the pressure for the FP&A team to serve as the “real analytical powerhouse” of finance has only increased, Edward Bush, CFO of FP&A software provider Cube said.

“It’s the same thing that was expected of the FP&A function five or 10 years ago, but to a much higher degree,” Bush said in an interview. As CFOs evolve into “chief future officers” and assume more strategic responsibilities, FP&A’s support is crucial.  

Embracing the AI-driven finance evolution

FP&A leaders today must act as the analytical right hands of their CFOs — a kind of braintrust of institutional data — something that can allow FP&A professionals to gain critical experience in operations as they navigate a potential path to the CFO seat.

Before joining payments platform Flywire as a CFO, Pitigoi led a team of 400 people serving as the head of FP&A for payments service PayPal. THe role left him acting as an operational bridge, helping to run finance alongside the head of investor relations when PayPal’s then-CFO John Rainey departed, he said.

The experience not only allowed him to develop a good sense of how to run a business operationally, but provided key lessons “from a leadership perspective” on how to drive impact for a company, Pitigoi said.

It’s crucial for aspiring FP&A or CFO leaders to get a clear picture of how emerging technologies like artificial intelligence and automation are changing the traditional role of finance. Pitigoi has members on his FP&A team which can code just as well as those on the analytics team, for example, he said, a change which comes as technology and data skills are becoming just as essential for finance leaders as accounting or finance acumen.

The need to hone both sets of skills comes as nearly all — 92% — of CFOs surveyed by Avalara indicated a belief that AI would help to improve efficiencies as well as drive up both productivity and profitability at their organizations. When it comes to FP&A, CFOs are looking to see how GenAI could fit into use cases such as forecast and budget variances, for example, according to Gartner.

Emerging technologies such as AI are starting to accelerate a trend that has been ongoing in finance for more than two decades — the push to become that strategic voice for the company, Cube CEO Christina Ross said.

Finance and FP&A are “still not doing the job they are meant to do,” Ross said in an interview. But, “if you think of a timeline of getting to be strategic versus being entirely transactional, that curve has accelerated, probably 10x in the last 10 years or so,” Ross said. “And that started with automation.”