Hiring your first FP&A analyst

What is an FP&A analyst?

A financial planning and analysis (FP&A) analyst is an accounting professional who works to develop plans and analyze financial results. These reports help a business make sound financial decisions.

An analyst has many responsibilities within a finance department. They may be asked to:

• Review historical data
• Interpret finance trends
• Create financial models and simulations
• Build what-if data analysis
• Create ad hoc financial modeling
• Develop strategies for financial management 

Financial analysts may also research specific information (e.g., investment banking trends) and make recommendations based on their findings. To do this job effectively, a candidate must possess strong analytical skills, knowledge of finance, accounting principles, and budgeting techniques, and experience with financial software programs.

What are the major job responsibilities of an FP&A analyst? 

An FP&A analyst is primarily responsible for reporting on an organization's financial performance and recommending improvements to business partners. In general, analysts perform tasks such as:

• Creating budgets and forecasts 
• Analyzing current and past financial data
• Performing flux analysis and variance reporting
• Assisting with month-end close activities
• Creating ad hoc analysis and reporting
• Building presentations for executive and Board meetings
• Maintaining internal controls information
• Identifying process improvements and efficiency opportunities
• Presenting operating and financial plan proposals

An analyst uses financial models, reporting software, and simulations to assess risk and develop strategies. An FP&A analyst should also be able to identify industry trends and recommend changes accordingly.

What technology should a corporate financial analyst be familiar with?

Spreadsheets: No matter how advanced software becomes, financial professionals (including those of us at Cube!) will always have a soft spot for Microsoft Excel. 

Accounting programs: Accounting programs are essential to the finance function, and FP&A analysts should be well-versed in them. Modern accounting software automates bookkeeping functions like invoicing, billing, and payroll, allowing analysts to spend more time on strategic decision-making. 

Data visualization tools: Raw data is more useful when presented in an easily digestible format. Visualization tools help finance teams understand and share data through charts, graphs, and dashboards. 

Programming languages: While no- or low-code software makes finance data more accessible to casual users, programming languages like SQL and Python enable analysts to manipulate large data sets and create effective analyses with the information. Programming languages help finance professionals develop predictive models and build machine learning tools. 

What qualifications do FP&A analysts need? 

Financial analysts possess a mix of hard and soft skills that allow them to successfully manipulate complex data, visualize potential problems and outcomes, and discover issues in financial data. They must also be able to communicate the data with others.

The prerequisites for most financial analyst positions are:

• A Bachelor’s degree in accounting, finance, business administration, or a related field
• A minimum of 1-3 years working in either finance or accounting
• Experience budgeting and performing basic financial analysis
• A solid understanding of Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS)
• Strong analytical skills and organizational abilities
• The ability to prioritize tasks and work well under pressure (e.g., budget season)
• Bonus: Professional certifications such as the Chartered Financial Analyst (CFA) designation

The top five traits of successful financial planning professionals

Qualifications and hard skills are desirable for any analyst, but many other factors determine an analyst’s success in your department. When hiring new FP&A personnel, look for candidates who demonstrate these hallmarks of success: 

Attention to detail: Sharp eyes are invaluable for any financial planning analyst. Analysts regularly encounter seemingly small details that have more significant implications. A keen eye for detail ensures accuracy in reporting and analysis. Even seasoned analysts occasionally miss things, but catching those mistakes is the difference between a solid financial plan and a misstep. 

Interpersonal skills: Working within the finance function requires analysts to interact with many internal and external stakeholders. Strong people skills enable these professionals to communicate effectively, resolve issues, solicit feedback, and manage reporting processes.

Communication: Financial professionals must possess strong communication skills to effectively convey complex financial information to stakeholders—including non-financial colleagues. They should also be able to summarize complex information in a concise and digestible way for their non-financial audience. 

Strong communication allows an FP&A analyst to more effectively share their findings with management and other stakeholders, as well as serve the overall financial performance of the finance function.

Leadership: Successful analysts have the leadership skills to take on and complete projects. They need to be able to advise, mentor, manage, and motivate teams to help them work towards common goals. This is essential for any FP&A analyst who hopes to progress in their career path.

Technical acumen: An FP&A analyst should have strong technical skills to effectively analyze financial data and make sound decisions. They need to be proficient with spreadsheets, databases, and other software programs to extract valuable insights from the data and use them to build complex financial models.

How to write an FP&A analyst job description

Use these steps to build a job description that will attract the best-qualified candidates and ensure a good culture fit with the rest of your organization: 

1. Consider your current need within the organization

Consider the level of experience you’re looking for. Would you rather find a junior analyst that can gain more skills on the job, or do you need a seasoned FP&A professional who can step into the role and take on higher-level tasks? 

2. Outline technical qualifications

Deciding on the level of analyst you need will guide the qualifications you’re looking for in a candidate. Decide on the level of education you want to see in an analyst, what tools they should know and use on day one, and create a brief outline of the responsibilities they’ll take on when they join the team. If you need an analyst for a specific industry (e.g., securities) or department, outline these requirements in the listing. 

3. Consider location and compensation

Once you’ve ironed out the details of the role, it's time to start thinking about the salary and benefits packages.

You'll want to consider the location for in-house (non-remote) roles, as the cost of living can be higher in some areas (like cities) than others. If the role is remote, consider whether you will offer location-agnostic or location-specific pay.

Also, consider other benefits that might enhance the experience for a new hire. Will you provide a commuter stipend? Does your organization match employee 401k contributions? These perks are both excellent draws to include in a job description.

Questions to ask during an FP&A interview

Finding the best analyst to join your team should be a carefully constructed process that evaluates candidates' technical skills, reasoning, interpersonal skills, and suitability for the organization. When conducting a job interview for a potential FP&A hire, consider asking questions about these topics to learn more about your candidate: 

Hard skills

These questions focus on the mechanics of the analyst role. Asking technical questions or offering scenarios for analysis helps you evaluate how the candidate handles certain situations. It can also reveal their ability to think on their feet and process new information. 

• Tell me about your previous finance experience.
• What experience do you have specific to our industry? 
• Walk me through the three financial statements and how they flow together.
• What licenses or credentials do you hold?
• Explain financial modeling and the major financial modeling methods.
• Walk me through the process of creating a journal entry.
• What experience do you have creating budgets and financial forecasts?
• Tell me about some financial tools you’ve used in past roles.
• How do you determine if the company is cash-flow positive?
• How do you conduct basic what-if analysis?
• Where should you look first to determine the financial health of the company?

Soft skills

These questions reveal the work style of a potential analyst. They can also shed light on past experience and skills that may not come through on a resume.

The way the candidate answers these questions and explains situations also reveals their communication style. It can give you an idea of how they'll interact with colleagues at different levels throughout the organization. 

• What experience do you have presenting information?
• Describe a scenario where you had to share information with a non-finance audience.
• Have you led a financial planning project within a team? How did you handle communication?
• How do you handle situations where you find errors or omissions in financial data?
• Describe a situation where you’ve disagreed with a manager or a decision.
• Have you managed other employees? If so, could you tell me about the experience?
• What was month-end close like at your previous job, and how did you handle it? 
• How do you handle stress on the job (deadlines, issues, etc.)? 

Culture fit

Finance teams must work together closely and handle stressful situations regularly. This is why finding a culture fit is just as important as finding someone with technical chops. Selecting a great analyst who will gel with the rest of the team ensures high job satisfaction and an enjoyable daily work environment.

• What do you like to do for fun? 
• Where did you grow up? What did you like or dislike about it?
• How did you feel about the working environment in your last role?
• How would your previous manager describe your contributions to the team?
• What are you looking to get out of your next finance role?
• If you weren’t in finance, what other industry would you like to pursue?

How can senior management cultivate strong analysts?

Getting a candidate in the door is just one part of hiring FP&A team members. Creating a great environment with advancement opportunities will significantly extend the tenure of your analysts and ensure they enjoy high levels of job satisfaction.

With retention and career development both front and center in the job market right now, senior management and executives can build teams that last by: 

• Maintaining a positive and open working environment with plenty of opportunities for learning and development.
• Creating documented career advancement and salary bands that help junior analysts move through the organization.
•  Fostering an atmosphere of collaboration and teamwork, both within the Finance department and throughout the organization. 
•  Offering (and encouraging) generous leave policies that help busy analysts balance life and work demands without experiencing burnout. 

Conclusion: finding the right fit

There's a lot that goes into finding the right fit for your organization. Following the steps listed above and asking the right questions are both great ways to secure an FP&A analyst you can count on.

But your job doesn't end there! Once you've found a solid FP&A analyst to join your team, it's crucial to ensure they have the tools they need to do their job effectively. Investing in a quality financial software tool that reduces manual processes, enables predictive insights, and boosts productivity within the finance department can help you do just that.

To learn all the ways a solution like Cube can set your current (and future) FP&A analysts up for success, contact us for a free demo today.