A Week in the Life of a Financial Planning & Analysis (FP&A) Manager, Thursday and Friday: How to Present Your 3-Year Strategy Plan to the CEO

25 Comments | Corporate Development & Corporate Finance - On the Job

13 Flares 13 Flares ×

FP&A Manager: A Week in the Life - 3-Year Strategy Presentation

This is the second part of “A Week in the Life of a Financial Planning & Analysis Manager” – if you missed Part One, click here to catch up.

The first 3 days of this week were all about setup and preparation: consolidating financials and plans from different European countries and getting ready to tell the “story” around why we wouldn’t be able to achieve the previous Net Income target.

Plus, some nonsensical formatting changes from our newly minted CFO and a few all-nighters from the analysts in my department.

This time around, you’ll get to see what happens when you present this type of 3-year plan at the world headquarters of a Fortune 500 company.

And, more interestingly, everything that can go wrong as you go through this process…

Thursday

5:00 AM – My alarm clock rings. I hate these early morning flights, but we’re the first ones pitching to the world headquarters in Germany. I feel bad for the poor guys flying in from the US on a red eye flight.

6:30 AM – I meet up with the CFO and my favorite analyst at the airport. The analyst went to the office early and printed out 30 pitches. We catch a quick coffee and check-in. Economy class of course; you can’t plan on firing hundreds of people and still fly business class (well, unless you’ve been bailed out by a large government…).

9:00 AM – Land in Germany and rush to the world headquarters. Our CEO arrived yesterday evening and he looks like he had a good night of sleep. I’m exhausted, but fortunately the CFO and CEO are doing the pitching today.

9:30 AM – We have a few minutes to catch up with the world headquarters analysts. Many analysts move freely between the European headquarters and the global headquarters, so I know most of the analysts because I worked with or for them at some point.

Being an analyst for the world headquarters CFO is a great career accelerator even if the title is not fancy – a lot of them become the CFOs of divisions in smaller countries after two or three years.

9:45 AM – The review starts with a pitch by the Chief Economist Officer of the firm, who presents some metrics about Europe and how the company is facing the crisis. I just love that guy. Maybe I should have worked in equity research or economics…

10:00 AM – Europe is on! The CEO starts with the major challenges from a marketing and sales standpoint, and also presents how advanced the headcount reduction plan is. He presents the same material he did the day before, but with completely different words and different examples.

At the CXO level your work is a lot less about execution and a lot more about communication, so you get more time to prepare your pitches. This is going to be my next challenge in a few years!

10:15 AM – The CFO only made it to the second slide before she got interrupted by a storm of questions. We’ve worked together for a few months now and she knows from the look on my face if I know the answer to a question, or if she has to make up an answer on her own.

10:25 AM – The questions continue. One of the analysts asks why we are €100 MM below last year’s plan for this quarter’s Net Income. Easy: because you forced us to assume 5% market growth… when it actually turned out to be -3% growth.

So thanks to your impressive macro forecast we are €100 MM below the previous plan. Our CFO is a better diplomat than me, and graciously answered that the market didn’t grow as we expected but we counteracted this effect with margin improvement.

11:00 AM – After approximately 50 questions about all our assumptions, projections, and metrics, it’s finally over. The global CEO was hostile to some of the Net Income numbers, especially for this year, but we held our ground, defended our forecasts, and made it through without major modifications.

11:05 AM – As we all get up, I see the global CEO speak to our European CEO. Our CEO caves in at the slightest hint of a confrontation, so I don’t like this.

11:15 AM – Our CEO is definitely too easy to break. He comes and tells us that he agreed to submit a bigger Net Income number for the year. If only I could negotiate my bonus directly with him!

11:30 AM – It kills me. We fought for 45 minutes for our number and now we have to find an extra € 200MM of Net Income for this year! I call the team back home and tell them to start preparing ideas. Time to go treasure hunting for those hidden reserves…

12:00 PM – Have lunch with my favorite analyst and two of her former colleagues. They are treasury analysts at the global headquarters.

I can see that one of them is interested in our team and since I’m looking for a new senior analyst to deal with funding issues and FX analysis, the lunch turns into an informal interview.

1:00 PM – I really like the guy! He was an FX risk analyst at an investment bank before moving to the treasury with us. Switching departments every two years between FP&A, Treasury and Controllership is very common in Corporate Finance so I might very well hire the guy.

Plus, he is not brain-washed by the corporate culture and I like that in my team.

1:30 PM – I should be working on the extra €200 MM, but I’m more interested in recruiting this analyst. I go see the global treasurer, who’s a good friend of mine, and ask him about his analyst.

He knows the guy wants to move to FP&A and gives me a very strong recommendation. I’ll invite the analyst over this month for some interviews but it looks like a done deal to me.

2:00 PM – Meeting with the CFO to discuss our options on the €200 MM we need to find. She seems very distracted. She had a tough one-on-one meeting with the global CFO about some of the reporting the treasury department handed in late.

3:00 PM – We find a few good ideas, mainly about some unrealized foreign exchange gains and some legal entity restructuring that could generate decent tax benefits. I email the tax director of Europe to see if the ideas are legit.

3:30 PM – Tax director calls me and says that it’s doable but will involve a lot of work if we want to make it happen this year. Good enough for me, the work is going to be on them!

4:00 PM – Head to the airport with my analyst. The CEO and CFO are staying tonight for some other meetings. The deadline for the final submission is 8:00 PM; there’s no way we can make it.

7:00 PM – Back at the office. The flight back was annoying because we wanted to discuss how to increase our Net Income forecast for this year, but couldn’t do that due to “security concerns.”

The risk is that someone could overhear and gather enough information to have a good view of our next financial results and then trade based on that inside information. The chances of that happening are slim, but I’m not risking my career on it.

7:30 PM – Team meeting. They prepared some ideas on how to get that extra €200 MM  this year. The new interns are astonished by the discussion.

They are transitioning from “school” corporate finance with endless discussions about corporate structure equilibrium and “optimal capital structure” to the real world, where people discuss how to release hidden reserves to appease the ego of the CEO.

8:30 PM – We agreed on how to get the €200 MM. After one hour of discussion and drawing on the whiteboards, we came up with a plan that doesn’t contradict everything we said today to the world headquarters team.

This is your main problem if you work in Financial Planning & Analysis: how to present data that won’t make you look like a liar or an idiot 6 months from now.

9:00 PM – Call the CEO and CFO to present the plan. I took the interns in my office for the call. For them it’s always a good experience to see how the “shot callers” question the plan and test its feasibility.

After 10 minutes of intense grilling to see if we can actually make that extra €200 MM  this year, the CEO and CFO accept the plan. It’s now time for submission.

9:30 PM – Glad I’m not the one submitting the plans anymore. The principle is dead simple: you take all your data from your Excel models and copy and paste it into a web service.

Then, at headquarters they just view a consolidated version from Europe, the US, and Asia that they can export into Excel if they want.

But that’s just the theory – in reality, the process is a disaster due to technology glitches and human errors.

The interns order dinner for everyone.

10:00 PM – First submission issue: the system is changing the numbers randomly.

I divide the work within the team and each analyst has to check 40 lines from the Income Statement or the Balance sheet, month by month for three years.

11:00 PM – The team corrected the mistakes. We submit the plan. Only three hours after the deadline, not too bad!

11:10 PM – Call from the world HQ analysts. Apparently we submitted salary expenses in the wrong category.

Since there are 10 lines for salary expenses with only slightly different names, we pick one and put everything in it. World HQ wants a split by employee categories. This is going to be fun.

11:30 PM – In an ideal world, you’d list the number of employees, the average salaries and bonuses, and the salary growth by category for the next 10 years.

Since it’s not an ideal world, we assume that the ratio of interns, regular employees, senior employees, and executives will remain the same. This is the only way to get it done before dawn.

11:45 PM – Call from my boss, the global FP&A manager. We discuss the assumptions for the salary expense split. He wants more “granularity”, which means we have to resubmit again!

12:00 AM – After trying to find the data somewhere on the server, I call the HR leader, who was in bed about to go to sleep.

He agrees to send me the detailed data in the next hour. I send my team home since we’re almost there. One analyst stays to help out with this last task.

1:00 AM – We receive the data from HR, format it, and submit it. The system didn’t randomly change the numbers this time around, so we head back home!

Friday

10:00 AM – After the 20-hour workday yesterday, I decided to arrive later than usual. The guys in Germany stayed up all night and they’re going to send us their feedback this afternoon. It’s going to be a slow morning.

10:30 AM – I take the 3 interns into my office. Two of them joined the team this week, so I give them an overview of what’s happening today.

We submitted a Net Income target for the next three years. Now the global FP&A team is going to analyze it and ask us for more. The way they do it year by year is:

  • Take the external analysts’ expectations for our firm – let’s say €5 B of Net Income, for example
  • Add 5% so we beat the expectations: €5.25 B
  • Add an extra 5% for safety in case Europe or the US miss their targets: €5.5 B
  • Subtract the numbers Europe, the US, and Asia submitted for this year (€5 B) from this €5.5 B, which means they still need to find €500 MM
  • Allocate this €500 MM between the 3 regions depending on the opportunities we think we have

We’re waiting to see what our share of the €500 MM is. When we get the number, we’ll allocate it between the 10 countries we manage.

11:00 AM – One of the interns asks me how we did the planning sessions before computers, even though I’m not even 10 years older than him and therefore don’t know the answer to this.

I answer that from what I heard, the plans were very “high level” and FP&A did not forecast all the Income Statement line items month by month.

Nowadays, we still do that “high level” forecast and discussion but we also create detailed forecasts – kind of useless, in my opinion, since you can’t predict the future to that granular a level.

11:30 AM – Kick the interns out of my office after answering their questions. We need to take care of another reporting issue regarding the quality of our assets, even though this planning session is taking up all our time.

12:00 PM – I divide my team into 2 groups. One group is going to take care of the reporting, and the other group is going to plan for the extra €200 MM we might get asked for today.

We don’t have to find the opportunities right now, but I know the CFO is going to ask for it anyway so I plan ahead.

12:30 PM – Take the team out to lunch. It’s been a tough week so far and they deserve a break on the company’s dime. Germany is not going to call before 3:00 PM anyway.

2:00 PM – Back to the office.

2:30 PM – Global FP&A manager calls me and delivers the good news: Europe gets €100 MM for this year and €50 MM for the 2 years after that. He said our arguments paid off and the global CFO decided to task the US with earning most of the extra Net Income.

3:00 PM – I’ve never seen our CFO so happy. An easy target means a higher chance of exceeding that target, and a higher chance of exceeding her expected bonus.

3:15 PM – Send the team back to work. We need to allocate the €100 MM between our 10 countries.

I want to see what the allocation would look like if we were to do it by number of employees, by Net Income generated last year, by balance sheet size, and by how much they managed to beat the plan by last year.

3:45 PM – Simulation of the allocation is done. I know the fair way to do it is to allocate based on last year’s Net Income, but I like to look at the rest as well because it gives me more of an argument when I negotiate with each country’s CFO.

4:00 PM – Tweak a few numbers in the allocation based on what I know from previous calls with the countries. Italy, for instance, is taking more because I want to squeeze out their hidden reserves.

4:30 PM – Meeting in the CFO’s office. She decides to put even more on Italy, since they know they have almost €25 MM extra out of the €100 MM. It’s going to be a hot debate.

5:00 PM – The CEO approves the allocation. We start to call the platforms one by one. No analysts are allowed on those calls, only the CFO and FP&A Manager of each country.

5:15 PM – We start with Italy. They have a tough pill to swallow, but they won’t go down without a fight.

The Italian CFO goes through all the stages, from denial to threats. He gets very angry, saying that we are out there to get him. My CFO says that she will call him directly in two hours when he’s calmed down.

These calls are off to a great start!

5:30 PM – Hungary was a lot better. They argued a little, of course, but I could tell they were relieved when they heard the number. But then, their number was quite small compared to Italy’s allocation.

7:00 PM – We’re done calling all 10 countries and things went pretty smoothly, except for Italy. The CFO goes to her office to call the Italian CFO. I’m glad I’m not part of this conversation because losing your calm like that is not going to help him out with his next career move.

7:15 PM – Check the work my team has been doing on the reporting. It looks fine and I just do some high-level checks to see if the numbers make sense. My analysts have all been here for a while and they know what they’re doing, so I know I don’t need to go too deep into my verifications.

7:30 PM – The Italian CFO accepted his extra €25 MM and we submit the allocation to the global headquarters. Reporting is done, so it looks like we might all go home to enjoy our Friday night.

7:35 PM – … or not.

The auditors call me with a fire drill, ruining a perfectly good Friday. 90% of the time they deal exclusively with the controllership department, but apparently they need us for an audit of the legal reserves we set up 4 years ago.

It triggered some foreign exchange accounting issues that we need to settle right now. Sure!

7:45 PM – I wasn’t even with this company 4 years ago, so I call a few people that know about those reserves so they can send me the accounting memos related to that.

8:00 PM – Two of my analysts and the interns work on understanding what happened, and I head to the gym for a short training session.

8:45 PM – Analysis is done. I’m not 100% confident it’s what happened back then, but it’s good enough for a Friday night. I call the auditors and walk them through my analysis. They say they’re going to send me additional questions on Monday.

9:00 PM – I call the global FP&A manager to see if they need any additional information from us. He wishes me a good weekend.

9:10 PM – Everyone is out for a peaceful weekend!

The End

I hope you enjoyed this week in the life of FP&A manager. This was far from a “typical” week due to the hours and work intensity, but that’s what happens sometimes.

These strategic planning sessions can last for up to a month depending on the number of resubmissions – so you shouldn’t assume that corporate finance roles are “easy,” especially if you’re at a Fortune 500 company.

Share your experience or ask questions in the comments!

A Week in the Life of a Corporate Finance FP&A Manager – Series:

About the Author

founded Finance-Resume.com in 2011 and has helped more than 100 clients land offers at top Investment Banks and Fortune 500 Finance Departments. From Analyst to Directors, he coaches his clients on five continents on their networking technique, LinkedIn profiles; he edits their resumes and cover letters, and grills them during intensive interview preparation sessions.

He’s been writing for M&I for three years now on corporate finance and related industries topic and also gives speeches on career performance to large audiences that include Fortune 1000 CEOs, executives and…ambassadors! Forthcoming in 2014, look for Thomas' book on Corporate Finance interviews.

Thomas focuses on long-term relationships with a small number of clients to deliver optimal results. If you want to know more about his coaching and resume editing services, please visit Finance-Resume.com or send him an email.

Break Into Investment Banking

Free Access to Exclusive Content for Members Only!

Loading the player...

Sign up for The Banker Blueprint today and enjoy:

ebook
  • Free Report: 57-page guide with the action plan you need to break into investment banking - how to tell your story, network, craft a winning resume, and dominate your interviews,
  • Exclusive emailed bonus material,
  • Free Banker Blueprint newsletter with more in-depth advice,
  • Unlimited access to all articles, videos, and advice - and free updates whenever new content is added to the site,

 

We respect your email privacy

Read below or add a comment...

25 Comments to “A Week in the Life of a Financial Planning & Analysis (FP&A) Manager, Thursday and Friday: How to Present Your 3-Year Strategy Plan to the CEO”

Comments

  1. Keith says

    Hi Brian,

    Great Article!

    I just wanted to get your opinion on something. I go to a “non-target” school, but a few people still make it in to Bulge Bracket Investment Banks and MBB Management Consulting Firms each year from my college.

    I have noticed a trend that the majority of people who make it in to Investment Banking and/or MBB Consulting from my college are either: Division 1 Athletes, in a Business Fraternity, in Honorary Societies (exp. Phi Betta Kappa), or in a Social Fraternity. Most people from my college who make into Investment Banking or MBB Consulting are part of a combination of all the various “exclusive” groups that I just mentioned above.

    Can you still get into Bulge Bracket Investment Bank or MBB Management Consulting Firm or really any field of business/company from a non-target college, while at the same time NOT being associated with ANY Business Frats, Social Frats, Honorary Society, Varsity Athlete, etc?

    When you were personally interviewing people, did you ever put any weight in what activities a person was involved in college? Do you put any weight now for your website when hiring people in what activities/clubs/groups a person was in college?

    I ask this question because I have no interest in joining any type of frat(business or social frats), and I don’t play any sports in college, but I still have aspirations of working in high-paying careers/jobs post college.

    • M&I - Thomas says

      Hi Keith,

      Brian will probably jump in later on but let me give you my thoughts.

      I don’t think there’s a direct link between “elite” activities and success at top firms. Yes it is interesting on a resume but you don’t hire someone for banking because he was a top athlete.

      On the other hand I think what make those people succeed in their activities, also make them succeed in their interviews/jobs.

      If you are serious about getting a top job I assume you are driven. Maybe investment banking/research competitions would be a good way to differentiate yourself. Here’s a link to my article on the subject http://www.mergersandinquisitions.com/investment-banking-case-competitions/

      I hope that helps!
      Thomas

      • Themb says

        While I have no insight on the actual questions, I definitely agree with Thomas that participation in this organisation is usually an effect rather than a cause. It can be a cause, if some banker checking a CV has the same background, but I’d think it’s more an effect of the general personality.

        I would however strongly advise on participate in this kind of organisations, for different reasons. The fact that it can be a cause as well, is one of them.

        Secondly, by seeking contact to people who have certain attributes (in this case, attributes which are beneficial for a career in i-banking/consulting/etc.), one picks up on the attributes or the attributes rub of to someone (this is similar to the notion of hanging around with smarter people to learn from them).

        Thirdly, and this is by far the most important point: Leaving your comfort zone will be an experience which can be rewarding for you life to come. You might actually like it and end up thinking why you have not done so earlier. You will improve your horizon and get in contact with people which can potentially enrich your life. And even if you don’t enjoy it and decide to pursue other activities afterwards, you still have learned a lesson and fought adversity. Those are also good experiences to have.

        High-paying careers and jobs usually come from a certain passion within a person. This passion is usually not money, but something else, which leads them to pursue a certain career path. And this passion usually enables one to be good at this career path, leading up to the coveted monetary reward. Somebody with a serious interest in or passion for banking or consulting (not necessarily everything, but elements), will usually find more than one way to dwelve into the topic even outside of internships (networking for interest, not purpose; business groups and frats; contests and what not). So you should probably put the search for your passion or interest first.

    • says

      I agree with Thomas and Themb that while technically you don’t need to participate in those activities to win offers in those industries, doing so will only help you for the reasons they stated.

      So even if you have no interest, you may want to try at least one – just for the networking opportunities and to meet new people (and get out of your comfort zone).

      I personally place no weight on activities when hiring people, but I am also not a large bank looking at your CV – they need people with much broader skill sets than I do, and they need to evaluate you in more depth.

    • M&I - Thomas says

      Hi Marcus,

      I hope everything is going well for you since we worked together ;)

      Thanks for your comment!
      Thomas

  2. Jim says

    Good lord this is all too true, and frustrating…

    “7:30 PM – Team meeting. They prepared some ideas on how to get that extra €200 MM this year. The new interns are astonished by the discussion.

    They are transitioning from “school” corporate finance with endless discussions about corporate structure equilibrium and “optimal capital structure” to the real world, where people discuss how to release hidden reserves to appease the ego of the CEO.

    8:30 PM – We agreed on how to get the €200 MM. After one hour of discussion and drawing on the whiteboards, we came up with a plan that doesn’t contradict everything we said today to the world headquarters team.

    This is your main problem if you work in Financial Planning & Analysis: how to present data that won’t make you look like a liar or an idiot 6 months from now.”

    • M&I - Thomas says

      This is frustrating in a way but if you think about it at the Fortune 50 company level, investor relations is not about the optimal capital structure, it’s about the optimal communication.

      So it makes sense in a way ;)

  3. Chuck says

    Thanks for this. It’s very interesting from the investor perspective. Never looking at any kind of “doubtful accounts” or etc. the same way again.

    • M&I - Thomas says

      Thanks for your comment Chuck. Yes it changes your perspective. Whenever I hear a company having a good year but booking a lot of reserves/impairments I know what’s going on.

      • Chuck says

        As a follow up, would a company missing a quarter completely but growing their reserves be a good or bad indicator?

        Is it a signal of giving up or is it more of a signal of resetting expectations to beat in the future?

        • M&I - Thomas says

          Well it’s hard to say because you probably won’t be able to evaluate the level of ALL the reserves just from the statements.

          It can just be because they need to get book more reserves or because they go in a “let’s miss it good” state of mind and they’ll come back strong next quarter.

  4. Big Law Guy says

    I went to a state school for my undergrad in finance, internship at a IB boutique and broke into strategy consulting at a big four accounting firm full time; and not the top one or second either. I spent two years there, aced the LSAT and got to a top three law school for a JD/MBA. I am currently an M&A and antitrust associate at a top three law firm and as you might expect I have billion dollar M&A transaction experience on my resume unfortunately as a lawyer. I am looking to break into a PE firm as a VP level position next year but i wouldn’t mind a downgrade to senior associate. VP level positions mostly means relationship building and making deals happen. Both of which I am a lawyer and have perfected over time dealing with clients. What are my chances? I rarely work with buy side clients though so my contacts don’t span that far.

    • M&I - Thomas says

      Well I think you kind of answered that one yourself. Can you show that you perfectly master the deal process from an IB side (which means you can manage analysts) + can originate? -> you might get to VP

      If not you probably won’t even get in at all because better candidates are hunting for those positions as well.

      So it all comes down to how well you can spin your lawyer experience.

    • says

      I agree with what Thomas said – law to IB is arguably easier than law to PE so you might want to consider that angle as well.

      VP-level in PE is some sourcing but also still a lot of deal execution. So you need to show strong evidence that a) You can bring them great investment ideas (i.e. come into interviews with a list); and b) That you understand the technical side and the finance behind how deals work in addition to the legal side.

  5. Sean says

    Great post Thomas. How do you find ex-bankers success at a Fortune 500 compares to someone with the same amount of professional experience, except joining right out of graduation?

    • M&I - Thomas says

      Thanks Sean. Really two different cases here. If they join for internal M&A or some kind of expertise role they’ll do fine because most of the guys are bankers anyway.

      If bankers join traditional corporate finance they can perform very well but the biggest obstacle is going to be learning the new culture of corporate finance and the company.

  6. Kevin says

    Hey Brian,

    I was wondering if it would be possible for you to write a mini-guide on how a first-year at a non-elite boutique to lateral to a elite boutique or BB. Performing well at the firm and getting as much good deal experience is critical I’m sure, but how much different is networking as a first-year compared to networking as a college student? Also, what would be the best way to discreetly interview and what would the timeline be for when a first-year should start reaching out to others or applying to other jobs.

    Thanks!

    • M&I - Thomas says

      Hi Kevin,

      I’ll let Brian share his thoughts on that but here are mine for now. This transition is not about networking with specific tactics. It’s about finding out what prevented you from breaking into the BB the first time and remove that obstacle.

      Poor networking -> start from scratch and this time you’ll have the edge because networking is easier when you are not obviously looking for a job

      Lack of “pedigree” / bad grades -> compensate with amazing deal experience.

      I hope that helps!
      Thomas

    • says

      I generally agree with Thomas on this… figure out what stopped you the first time around and fix that. We have a few articles on lateral moves:

      http://www.mergersandinquisitions.com/lateral-hiring-101/
      http://www.mergersandinquisitions.com/lateral-investment-banks/

      Also, there is a fantastic interview coming up in the next month with someone who made a lateral move from a valuation/advisory role to a large bank and he has some thoughts on everything you asked about as well.

      Generally, you want to be very focused and only target specific banks / roles or you will be spread too thin if you’re working full-time already. And try to rely on a few solid contacts with great connections rather than making a “spread your net wide”-type effort as an undergrad might do.

      Timeline: As soon as possible. Some people argue you “need” to wait a year, but our upcoming interviewee actually wished he had started earlier, if possible. So I think you should do it as soon as you have at least a few solid work experience entries to point to – people are always quitting at large banks and turnover is very high, so there isn’t much point in waiting until an arbitrary time.

  7. Alex says

    Hi guys, i want to work in IB or other finance areas (hedge fund, prop trading) and just graduated from my bachelors degree in computer science but havent been able to land any job offers (due to my university being middle tier), i can get into a postgrad program at just about any university, which degree should i do and where to break into BB IB?

    • M&I - Thomas says

      Hi Alex,

      I think the biggest decision for you is not which postgrad program but which career you want. Do you have any interest in trading ?

      Picking a career will give you the best postgrad options. Also it’ll give you a direction for the networking because the lack of job offers is probably due to that as well.

  8. Long time reader says

    Very interesting series, I enjoyed the writing style a lot. Thanks for the granular insight, Thomas! ;)

Leave a Reply