Building The FP&A Dream Team Part 2: How to Create the Most Efficient and Effective FP&A Team - Finance Silos

Building The FP&A Dream Team Part 2: How to Create the Most Efficient and Effective FP&A Team

In Part One of “The FP&A Dream Team the article highlighted the differences between efficient teams and effective ones.

Key takeaways:

  • Efficiency is creating a desirable output based on time and resources put in
  • Effectiveness is producing intended results based on delivery and ROI and is less time focused.
  • Executives like to focus on effective results but recent market downturns are causing people to balance efficiency as well.
  • Inefficient FP&A teams cause $7.8 billion of losses per year in the US alone
  • Successful and sustainable companies need a healthy balance of efficiency and effectiveness in order to produce the best results.

Part II will focus on how to build the best FP&A team possible by combining the right levels of efficiency and effectiveness.

How to build a highly efficient FP&A team

1) Secure team and company buy-in

Changing how the FP&A team runs will cost money and time, therefore having buy-in from all parties involved is the first step. Whether it’s adding technology, talent, or changing the mentality of the department, work, time, and money will be involved and everyone needs to be on board.

The team needs to understand how improving efficiency can positively impact everyone- the FP&A team, the company as a whole, and even their professional development. Once the FP&A team is on board then it will be far easier to bring the executives on board as well, as they will see the value it brings to the organization.

Once both parties are committed then the next steps involve implementation.

2) Build on what you have

As long as there was already an existing FP&A team, no matter what the size or experience, then the company has what to build on. The team leader has a tremendous head start on what works and what doesn’t.

If there are inefficiencies or things that need improvement, then that’s the first thing to identify and work out. Examples of these are improving analysis tools, financial performance reports, or better communication.

In addition, experienced leaders have a better grasp of which small improvements need to be made. Reducing manual work, and updating systems are a few examples that seem minor but can improve the process tremendously, freeing up that precious time that can be spent on improving other FP&A processes.

3) Automate whatever possible

The biggest part of an efficient FP&A process is time. Automation and technology allow for more efficient processes, and you can’t talk about efficient FP&A without automation.

There is financial automation for everything. Budgeting models, forecasting, what-if scenarios, workflows, accounting, and the list goes on. Automation doesn’t just save time, it saves time for one of the most valuable departments in the company who can then use their skills for deeper analysis and things that can propel the company forward.

While many FP&A teams are worried about making the switch to automation due to the time it takes to implement and learn a new platform, starting with FP&A solutions that are Excel based will solve this issue. Finance experts can stay in the familiarity of Excel, but still gain all the benefits of automation.

Automation isn’t a short term solution or a temporary fix, it’s one of the most important factors in building a balanced efficient/ effective FP&A team. The amount of data only gets larger, and the number of factors that need to be analyzed grows with it. Automation is the difference between reaching the full FP&A team potential and just getting by.

4) Increase Cross-Functional Collaboration

Since effectiveness is measured in metrics and ROI from a company wide standpoint, it only makes sense to include other departments in collaboration and planning. FP&A makes plans and budgets for the entire company, therefore understanding each departments’ needs and wants is critical for effective outcomes down the line.

But creating a good culture of collaboration will not only improve effectiveness, it will also improve efficiency. Increased alignment with Revenue Operations is one of the most important alliances for finance teams. Oftentimes, RevOps uses processes and tools that promote shorter sales cycles and increased communication with Sales, Marketing, and Customer Success and partnering with them to set up efficient processes for the entire organization can increase efficiency on all fronts.

Even more so, reaching out to collaborate will make the FP&A team realize that increased efficiency is something that every department seeks more of.

With the increase in communication tools, physical distances no longer a problem, and the amount of data that each department holds, efficiency can be improved a tremendous amount by collaboration throughout the company.

5) Track Efficiency KPIs

While effectiveness in business is all about metrics and ROI, efficiency is not. An effective sales team may reach their target of $25 million ARR, but understanding if that goal was efficient is much harder to measure in KPI form.

That doesn’t mean that there is no such thing as KPIs that measure efficiency, it just means that they are harder to create and different for each company. However, they are still incredibly important in understanding how effective and efficient the FP&A team is. Here are a few examples of where to start: (Note: a lot of the best ways to track efficiency are in comparison to other time periods or industry standards. Therefore, efficiency KPIs can be a more long term process with ups and downs.)

  • Time: How long does it take to complete a project from start to finish? (whether in comparison to previous time periods or just as a metric)
  • Waste: How many incomplete projects were there or unaccountable blocks of time?
  • Accuracy: What percentage of deliverables were free from error?
  • Revenue per employee: What is the average revenue generated per employee? In other words, what is the most efficient number of employees per revenue percentage?
  • Resource utilization: What percentage of available time was fully used?

Efficiency aims to complete more value adding work in less time. Therefore, efficiency KPIs are not there in order to create a feeling of mistrust or micromanagement, rather they are there in order to put an identifiable metric on efficiency, something that is hard to measure in a long term and constantly changing role such as FP&A.


Efficiency and effectiveness are two ways to measure output. Some teams focus more on one than the other, and many people think they have to come at the expense of each other. Although each one has its pros and cons, and depending on the situation they can be hard to measure, it is very possible to achieve an efficient and effective balance in an FP&A team. Following these 5 steps will help your company achieve the ideal balance and build the dream FP&A team.

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