There is a lot happening in Accounting these days not least when it comes to automation. The rate of automation has increased by 20%-points in the past two to three years. That makes it a good time for accountants to consider their future careers. A very viable career path to consider is switching from accounting to FP&A which is in high demand now.
However, making the switch needs time and attention to be successful. The work is different, and you need to develop somewhat different capabilities. Today we will tackle some of the main differences between the work in Accounting and FP&A and what accountants wanting to switch need to be aware of. The key difference though between the two functions is that in Accounting we mostly produce the numbers whereas FP&A needs to use the numbers.
This also often leads to accountants feeling the numbers should be close to 100% correct and they take pride in providing high-quality numbers. In FP&A there is more focus on forward-looking numbers and doing analysis where judgment calls need to be made every time. This perhaps is the most fundamental switch between the two.
Differences between Accounting and FP&A
Let us look at some of the areas where it makes sense to compare Accounting and FP&A.
- The daily work: In Accounting, you work mostly with processing transactions and controlling entries. In FP&A you analyze the numbers and discuss their meaning with your stakeholders.
- The tools: Accountants work in ERP systems and use reporting and consolidation tools to get an overview of their entities. Financial analysts work with BI tools and planning systems mostly and often use PowerPoint and other forms of presentation media.
- The capabilities: Accountants need to have a keen eye for detail and precision to get the numbers right. Any material misstatement could cost the company dearly. Financial analysts need strong presentation and communication skills as they put the numbers in front of senior leaders.
- The stakeholders: In Accounting the main stakeholder is the CFO and typically other parts of Finance such as FP&A. That means you are talking to people that have a similar understanding and perspective on things as yourself. In FP&A the CFO remains an important stakeholder but equally so is the other CXO’s and their leadership teams. That means stakeholders mostly reside outside of Finance and you need to speak a different language to ensure they understand your messages.
- The objectives: In Accounting, you are often measured on quality and timeliness whereas in FP&A you are more measured on business outcomes although forecast accuracy is often also seen as an objective.
There are more areas you could make comparisons on but you likely get the point about the differences. That also means that making a switch will not come without effort. In short, you will need to gain experience with new tasks, work with other tools, learn new skills, work with different stakeholders, and achieve another type of objective.
So how do you make the jump?
The best way to make the jump is to start learning now. Volunteer for projects that are more FP&A-related. Train yourself on tools used by FP&A and ask for courses in soft skills like communication and influencing skills. Most importantly, try to involve your manager to create a solid plan for how to make the transition.
As so many things are happening in Accounting now that can impact your future role the best gift you can give yourself is the gift of a learning mindset. Learning is also at the top of the ranks in terms of skills needed going towards 2030. Learning is simply the only way to keep up.
If you have already made the jump from Accounting to FP&A how did you do it? If you are thinking about making the jump what concerns or questions do you have? You do not have to make the jump alone as I am here to help you. Always feel free to reach out to discuss any career move/change you want to make! So, what is it going to be? Will you make the jump from Accounting to FP&A?
This blog is presented by ValQ in collaboration with Anders Liu-Lindberg, Business Partnering Institute.
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