By Jason Flanders, Global Executive Director, Robert HalfThe day-to-day challenges of operating a small business can prevent owners from thinking as much as they should about the future, including identifying potential financial risks and opportunities for growth.However, there is a two-pronged solution that can help small business leaders engage in more informed and future-forward decision making. Few consider it seriously, though, because they assume it is reserved for larger organizations — which is definitely not the case. That solution is:Using financial planning and analysis (FP&A) — a set of processes that provides a framework for analyzing financial data and trends so you can make decisions based on comprehensive insights rather than your gut instincts alone.Hiring a skilled FP&A consultant to help your business make the most of these data-driven and potentially game-changing processes.In this post, we take a closer look at how using FP&A and engaging an FP&A consultant can create advantages for your small business, including helping you to drive growth and profitability, increase resiliency, and lay the foundation for long-term financial success.
An FP&A consultant is a financial expert who assists businesses in managing their financial planning, forecasting, budgeting and performance analysis processes.These highly skilled professionals typically work with organizations on an interim or project basis, providing specialized guidance and insights to help improve financial performance, optimize resource allocation and support strategic decision making.Companies undergoing significant growth, or other transitions like mergers, acquisitions and restructuring, will often bring in FP&A consultants to assist with advanced financial planning. Consulting solutions allow them to access critical expertise that may not exist internally and supplement their existing teams with additional capacity.
In its 2024 Global Finance Trends Survey Report, global consulting firm Protiviti, a Robert Half subsidiary, explains that FP&A has become a critical function across all business areas. Protiviti also notes that 69% of finance leaders in public organizations rate financial planning and profitability analysis and reporting as a high priority in the year ahead. But again, while enterprises are widening their embrace of FP&A, these activities can create benefits for small firms, too. In fact, a small business can use FP&A for the same reasons a larger company would — to protect its long-term financial health and sharpen its competitive edge. FP&A consultants can be especially valuable when a small business is scaling up, seeking external funding or navigating complex financial challenges. With a small business FP&A consultant on your team, you can gain strategic insights that will help you prepare for different possibilities that create risk, opportunity or both. Effective FP&A will help you to navigate challenges, capitalize on emerging trends and achieve sustainable growth more effectively while:Improving financial performanceThe detailed budgets and accurate forecasts FP&A processes generate will allow you to take a more strategic approach to how you allocate your financial resources. By combining historical data and predictive analytics, you can make data-driven projections that can help you manage cash flow, drive sales, control costs and optimize investments.Tracking progress toward business goalsFP&A helps you keep your financial goals aligned with your strategic objectives. Through ongoing FP&A — whether you do it annually, quarterly or monthly — you can monitor the performance of your small business against your targeted goals and quickly identify and address any deviations.Surfacing and managing risksEnhanced risk management is another benefit of effective FP&A. You can use FP&A processes to identify financial risks early so you can develop appropriate mitigation strategies. You can also create contingency plans to weather potential financial disruptions, including unexpected challenges.Increase operational efficiencyBy establishing and monitoring key performance indicators (KPIs), FP&A helps a company not only track progress toward goals, but also make data-driven improvements to how they operate. Analyzing your small business’s financial and operational data can help you identify inefficiencies and areas where costs can be reduced — without compromising quality.
One reason small business owners may perceive FP&A as a function for larger businesses is because it’s so resource-intensive. Some big companies have entire teams devoted to FP&A. Following the disruption of the recent pandemic and amid ongoing economic uncertainty, many organizations have stepped up their hiring of professionals with FP&A skills to help them increase financial efficiency and resiliency and stay more attuned to potential risks lurking on the horizon.Research for Robert Half’s Demand for Skilled Talent Report found that planning, budgeting and forecasting is one of the top strategic priorities for finance and accounting managers this year. (So, too, is data and analytics.) One-third (33%) of hiring managers responding to a Robert Half survey say it is tough to locate skilled talent for FP&A roles.If you want to make FP&A a practice at your small business, you will need to align resources with specialized skills. You may have an accountant, bookkeeper and other staff handling critical financial processes for your company, but these team members may not have the time or skill sets to devote to data-heavy activities like forecasting and scenario modeling.Hiring staff for FP&A may be a challenge, given the lack of available talent in the job market. You’ll also need to be prepared to offer generous compensation to compete for these in-demand professionals.However, it might not be the right move anyway to bring on a permanent staff member to handle a process you might only want to do annually or quarterly. Engaging a skilled FP&A consultant for your small business could be a better strategy, especially if you want to ramp up your FP&A function quickly.Consider these five advantages of working with a small business FP&A consultant:1. Technical expertiseSkilled consultants are well-versed in the latest financial tools, technologies and best practices for FP&A. They can even provide training and support to your staff members who may need or want to work with the new solutions and systems you implement for FP&A, like data visualization and analytics tools.2. Industry insights
Many consultants who specialize in FP&A also have experience working across various industries. They can offer valuable insights and benchmarks to help you understand how your small business is performing relative to its peers as well as indirect competitors.3. Objectivity
An external consultant can provide your small business with an unbiased perspective that is free from internal politics and preconceptions. This objectivity is crucial for delivering objective and accurate financial analyses you can act on with confidence.4. Accelerated implementationWith their experience and focus, external consultants can often implement FP&A processes and systems faster than an internal team could. This means your small business can realize the benefits of FP&A processes sooner. The best small business consultants will also use best practices and proven methodologies to make sure your FP&A initiatives are set up for success from the outset.5. Scalability and flexibility
Another benefit of engaging a small business consultant for FP&A is the ability to work with them on a project basis. This scalable staffing approach gives you access to the high-level expertise you need without making a long-term staffing commitment and increasing overhead.Plus, by using an FP&A consultant, you and your core team can focus on what you do best to serve your customers effectively and help your small business to thrive.
Robert Half can help. Get in touch with us today to find flexible consulting solutions that align with the needs of your small business.
