FP&A —or Financial Planning & Analysis— is the discipline that brings together financial planning and analysis to improve financial control through processes such as budgeting and forecasting, as well as subsequent performance analysis via financial reporting. This practical guide explains what FP&A is, why it is the alternative to Excel for mid-market companies and how to implement it to make faster, more profitable decisions.
By Strathens Media | Date: September 18, 2025 | Reading time: 7 min
If in your company planning, budgeting, forecasts and reports still pass through spreadsheets, this article is for you. Knowing what FP&A is means understanding that it is not just “making an annual budget”, but building a continuous process of financial planning and analysis that turns data into fast, reliable decisions. For mid-market companies, mastering FP&A makes the difference between reacting late to cash or demand problems and anticipating them with concrete plans that optimise resources and growth.
Throughout this guide we will cover definitions, key processes (budgeting, forecasting, financial reporting), why Excel no longer suffices as a backbone, which components structure an effective FP&A function and how companies adopting these practices achieve better competitive results. We also describe a practical migration roadmap and examples of use cases with real impact.
1. What is FP&A and what is its purpose?
FP&A —or Financial Planning and Analysis— is the function that turns numbers into strategy. While accounting certifies the past, FP&A looks to the future: it builds budgets, adjusts forecasts, analyses variances and prepares the information that boards and management need to make decisions. Its purpose is simple and powerful: align resources with strategy to maximise return and reduce uncertainty.
Operationally, FP&A covers:
- Financial planning (budgeting): allocation of resources by business unit and expense line.
- Forecasting: periodic updating of the financial outlook according to operational reality and estimated sales.
- Financial reporting: generation of reports and dashboards for executives and defined operational areas.
- Variance analysis and “what-if” scenarios: understanding why deviations occurred and evaluating alternatives.
FP&A is not an isolated department: it is the interface between finance, operations and management that translates strategic objectives into actionable metrics.
2. Why FP&A matters for mid-market companies
For a mid-market company, FP&A is not a luxury —it is a competitive necessity. Companies that implement solid financial planning and analysis practices show clear advantages: better cash control, faster decisions on where to allocate resources, and greater ability to scale operations without losing profitability.
Some concrete benefits:
- Financial control: up-to-date budgets and forecasts reduce liquidity surprises.
- Better decision-making: scenarios and dashboards make it possible to evaluate options in hours rather than days.
- Efficiency: automated reporting and consolidated data free the team for strategic analysis.
- Visibility by channel/point of sale: understanding margins by store or channel helps optimise promotions and stock.
- Governance: versioning and traceability reduce errors and facilitate audits.
3. Excel: powerful but limited as the FP&A core
Excel is the universal tool: flexible, accessible and perfect for prototyping models or performing ad-hoc analysis. But when Excel becomes the alternative to an FP&A system to continuously consolidate data, plan and report, structural problems arise:
- Human errors and broken formulas.
- Difficulty consolidating multiple sources (ERP, CRM, POS, e-commerce, banks).
- Lack of version control and traceability.
- Manual reports that consume resources and time, and are static.
- Limitations for complex scenarios and real-time collaboration.
This does not mean abandoning Excel: it remains useful for ad-hoc analysis. The main difference is that an FP&A platform governs planning, forecasting and financial reporting so that the C-level and the board can make decisions with reliable, real-time data.
4. Essential components for effective FP&A
A robust FP&A function combines processes, people, data and technology. Each piece is necessary:
Processes: clear cycles for budgeting and rolling forecasts, synchronized closes and reconciliations, and validation committees that formalise decisions.
People: analysts with quantitative skills and business insight; business partners who connect finance with operations; executive sponsorship to enforce discipline.
Data: source integration, a single data model (accounts, SKUs, cost centres) and quality routines that ensure decisions are based on reliable information.
Technology: an FP&A platform that enables automatic consolidation, real-time scenarios, approval workflows and automated reporting with traceability.
Without these components, FP&A is incomplete: isolated processes or bad data produce misguided conclusions.
5. Budgeting, forecasting and financial reporting: how they work together
Budgeting defines annual priorities: where to invest, how much to spend and what results to expect. It is the financial roadmap. Forecasting updates that roadmap with real data —a process that must be dynamic and frequent. Financial reporting communicates status, deviations and recommended actions.
A good FP&A process orchestrates these three elements: the budget sets targets, the forecast shows the real path and reporting translates the gap between them into decisions.
6. Alternatives to Excel and selection criteria
When choosing an alternative to Excel, evaluate three critical capabilities: real connectivity, governance and speed of implementation.
- Connectivity: native connectors to ERP, POS, e-commerce and banks.
- Governance: version control, permissions and auditing.
- FP&A functionality: scenario engine, rolling forecasts and collaborative workflows.
- Time-to-value: ability to start with modules without massive projects.
- Scalability and APIs to integrate BI, AI or accounting systems.
The practical key: run a PoC to validate connectors and reporting before migrating the entire operation.
7. Conclusion: FP&A as the backbone of decision-making
FP&A is not an optional extra: it is the systematic way a company converts strategy into profitable execution. For mid-market organisations that still depend on Excel, the practical recommendation is to keep Excel for ad-hoc analysis, but adopt an FP&A platform that guarantees integrity, collaboration, automation and simulation capabilities.
The realistic path is simple: diagnose where the value is, prioritise cases with measurable returns, test with real data, deploy in phases and measure adoption with clear KPIs. Doing this properly gives the team back time, reduces errors and, above all, improves the quality and speed of decision-making —the competitive advantage today.
Discover how Starthens can transform your organisation’s financial planning and analysis.