02 — Capability · BC-220
Financial Planning & Analysis
Turn strategy into a financial plan, forecast where the numbers are heading before the period closes, and explain the gap between the two in terms a decision-maker can act on. The capability is forward-looking where accounting is backward-looking.
- FP&A
- Management Accounting
- Business Finance
- Planning & Forecasting
In scope
- Annual budgets and long-range financial plans tied to strategic targets
- Rolling forecasts and the drivers that move them
- Management reporting, variance analysis and the commentary that goes with it
- Business cases and the financial appraisal of investment choices
Out of scope
- The closed actuals the plan is compared against (see BC-210)
- Choosing which initiatives enter the portfolio (see BC-180)
- Cash forecasting for liquidity purposes (see BC-230)
Realized by · 5
- SAP S/4HANA · Financecore via BC-220.40
- SAP S/4HANA · Project Systempartial via BC-220.50
- Workday · Adaptive Planningstrong via BC-220.10
- Oracle Fusion Cloud Applications · Enterprise Performance Managementcore via BC-220.10
- Oracle Fusion Cloud Applications · Project Managementpartial via BC-220.50
Used in · 6
- Procure-to-Pay · 01 Identify Need & Requisition via BC-220.10
- Procure-to-Pay · 07 Review Supplier & Spend via BC-220.40
- Idea-to-Product · 02 Validate & Decide via BC-220.50
- Record-to-Report · 04 Analyze & Explain via BC-220.30
- Demand-to-Change · 02 Assess & Prioritize via BC-220.50
- Plan-to-Produce · 06 Record & Book to Stock via BC-220.40
Build it · 0
- Nothing in the library points here yet.
Decomposes into · 5
- BC-220.10Budgeting & Long-Range PlanningSet the financial targets for the year and the horizon beyond it, allocate resources against them, and get the organization to commit to the result.
- BC-220.20ForecastingPredict the period's outcome while there is still time to change it, updating the view on a rolling cadence from the drivers that actually move the business.
- BC-220.30Management Reporting & Variance AnalysisGive each manager a view of their results against plan and forecast, and explain the differences in terms of causes rather than account codes.
- BC-220.40Cost & Profitability AnalysisKnow what each product, customer, channel and activity truly costs and earns, so decisions about what to grow, fix or stop rest on margin rather than revenue.
- BC-220.50Investment AppraisalEvaluate proposed investments on a common financial basis, track whether the promised benefits arrive, and feed what was learned back into the next appraisal.