A Step-By-Step Guide to Finance Business Partnering

Finance teams

We cover step-by-step how finance business partnership can analyze and present financial information for strategic insights and decision-making.

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Priyaanka Arora
October 13, 2022

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A Step-By-Step Guide to Finance Business Partnering


As companies globally struggle with geopolitical, economic, technological, and competitive changes, finance business partnering is in a unique position to create strategic advantages. 

There is a greater demand from the business for finance to drive performance. It comes as no surprise that business leaders expect and seek active partnerships from the finance department and FP&A teams to serve as the center of intelligence, information, and decision-making. 

Strategic finance partnership can analyze financial information, provide strategic insights based on the industry, macroeconomic trends, and competitor dynamics, and present recommendations to support strategic decision-making. 

So the question is, how do you establish a successful finance business partnership? 

Why is it important to establish the finance team as a business partner? 

Traditionally, finance teams played an important role in FP&A, core finance, controls, and compliance. Today, along with this, they are expected to collaborate with business departments to support strategy and decision-making and champion finance and enterprise-wide transformation. 

A strategic finance partnership involves digging deep and learning about the lines of business, figuring out the story the data is telling and developing business insights. 

Plainly put, finance teams provide data-backed insights and they create value by influencing their business counterparts to make better decisions. This is the very essence of finance playing the business partner role. 

What does a financial business partner (FBP) do? 

Let’s start by defining a financial business partner. 

An FBP is defined as a role that the financial department takes up to support and challenge the “business” with an aim to ensure that the strategic path chosen is able to create desired value against acceptable levels of risk. - PwC report

The role of finance, as a business partner entails: 

Turn opportunities and threats into business drivers 

Successful FBPs (cost-efficient, reliable processes, and high-quality insights) can turn opportunities and threats from external factors into drivers for business partnering. Highly effective FP&A departments act as an advisor for the organization. 

Leverage enablers and anticipate constraints 

Finance business partners should know how to make use of the right enablers (such as having consistent and real-time information) and anticipate constraints (such as too much focus on non-value-adding activities). 

Use technology for competitive advantage 

Highly efficient FP&A functions are open to continuously changing technology developments to be prepared to answer future questions or automating FP&A activities that are transactional and highly repetitive in nature. 

Look into the future 

Powerful FBPs should be on the lookout to create new insights by means of in-depth analysis and aptly communicate it to the stakeholders to effectively assess the performance of the business. 

Is FBP an individual role or a team responsibility? 

Although companies have a fixed role of FBP, the team as a whole must think of ways in which they can collaborate with the rest of the organization. Owing to the following responsibilities of the FP&A team, it is only right to establish itself as a strategic decision-making partner. 

Controller: Focus on understanding the business and controlling the cost under budget with accuracy. This includes historical analysis as well as rolling forecasts. 

Advisor: Focus on building relationships with internal and external stakeholders and perform “what-if” scenario analysis on the impact of major business decisions. 

Influencer: Promote financial modeling and driver-based planning to identify the organization’s key business and value drivers and create business plans and budgets based on these drivers. 

Strategic partner: Promote scenario planning to identify the set of uncertainties and drivers that may impact results and protect the business from unnecessary risks. 

How to establish your FP&A team as a strategic business partner? 

For finance to play a greater role as a value creator, it will require a transformation of the function and a change of mindset among business partners. 

In this transformation, the FP&A, as a strategic business partner will play a major role as it helps the organization become more agile, data-driven, and forward-thinking. Here’s how. 

Adopt FP&A best practices 

They include: 

  • Undertaking financial analysis to identify trends and patterns in the organization’s financial processes. 
  • Preparing reports that the management can use to formulate the company’s operational and financial success.
  • Collaborating with departments to collect financial data and consolidate it to prepare the company budget. 
  • Creating, maintaining, and updating financial forecasts and financial models. 
  • Preparing detailed reports and presentations to support decision-making for investors, executives, and board members. 

Automate manual processes 

The current times of increased volatility call for FP&A teams to rethink the models they use to create financial forecasts and plans. There has been an increased focus on first building scenarios and then thinking about their implications on the business. 

FP&A organizations are also identifying new drivers of performance and creating financial forecasting models such that the outcomes can be tied more closely to underlying organizational drivers and economic variables. 

In addition, finance teams are creating driver-based plans that give them an inherent advantage over their simpler counterparts. 

All this has led to a greater demand for real-time, high-quality, and traceable data. Manually collecting this external data that can be used for identifying what drives the organization forward is difficult and error-prone. 

That’s where automating the FP&A tasks such as: 

  • Data preparation,
  • Importing data from several business sources and integrations, and 
  • Running comprehensive what-if scenarios saves time, allowing teams to focus on value-driven tasks. 

Standardize data and definitions of data

Suppose FP&A collects relevant data for ad hoc analysis using spreadsheets. This is going to take an inordinate amount of time. The next challenge would be standardizing the data-gathering and analysis process. 

To counter this, organizations are turning to cloud-based financial forecasting and planning tool Pigment. These tools gather data from sources across the organization and create a single source of truth to identify trends between different types of data that may have previously gone unnoticed or would’ve been impossible to correlate.

A clear understanding of the factors that have the most impact on financial results enhances strategic planning and the findings can be used to inform decision-making moving forward. 

Invest in an integrated business planning and analytics tool 

The new demands on FP&A have led organizations to consider how technology can help them scale efficiently. 

Integrated business planning software can help decision-makers see and manage trends and exceptions more rapidly, iterate scenarios faster, and understand the likely impact more quickly. 

Here’s how business planning and analytics tool Pigment can help finance and FP&A carve go-forward strategies: 

  • Provide features to consolidate and aggregate large amounts of data from all sources, store it, and clean it for analysis. 
  • Make dynamic models in a matter of hours. 
  • Collect inputs from all departments, surface insights from your data, and connect business cases from across the organization. 
  • Run what-if scenarios to plan for contingencies quickly. 
  • Use advanced reporting features to build accurate insights and identify trends. 
  • Leverage technology to evaluate forecasts, decisions, and outcomes and improve FP&A processes. 

Adopt cross-functional collaboration 

Historically, finance was entrusted with the responsibility of collecting information across the organization. The modern FP&A business leader, who serves as a strategic finance partner is expected to collaborate with other departments across the business. Holding data isn’t enough, and more time should be spent on analyzing data, understanding key business drivers, and conducting meaningful discussions to achieve strategic targets.  

For finance to function as a value-centric entity and a true partner for all other functions, having instant access to information and analysis is critical. In order to move in lockstep with sales, IT, human resources, tech, and other functions as a strategic counterpart, instead of learning about decisions after they go live.

This is only possible when FP&A adopts cross-functional collaboration by breaking down decision silos. The best outcomes are possible when there is transparency and alignment, right from operational deployment to financial impact. 

Focus more on developing meaningful insights 

Armed with technology, next-level FP&A organizations are instrumental in building conviction around strategic moves based on delivering meaningful insights. 

Specifically, FP&A teams, as finance business partners, can help the company determine how and when to steer financial resources toward the highest-value activities. 

An important point worth remembering is that the FP&A function will need to continually shift between planning, execution, and delivering critical business insights that empower the leadership to make bold moves. 

Encourage the entire company to understand the value you deliver as a department

Sales, operations, finance, marketing, and other disciplines, all need and benefit from flexible planning and analysis. All these departments could use the same business planning tool to gain insights and manage performance. 

The FP&A is already evolving as a strategic business partner and challenger. This is why the onus is on the FP&A function to build awareness about their role and show the value they deliver as a department. Afterall, streamlined planning, forecasting, and budgeting can drive major cost savings across the organization. 

Successful finance business partnering can drive business outcomes, not just predict them 

The best-run finance business partnership has a clear roadmap for transforming the finance and FP&A into the profit center. 

A bonus tip for strategic finance partners: Reflect on what you can do to add more value to your role and implement cutting-edge business planning technology to free up your time and mind space.

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