A Week in the Life of a Financial Planning & Analysis (FP&A) Manager, Monday to Wednesday: 3-Year Strategy Plans, Loopy CFOs, and Midnight Excel Marathons
In theory, corporate finance is supposed to offer “better hours” and “less stress” than investment banking…
And it’s a nice theory most of the time: my last feature on 24 hours in a life of a Corporate Finance analyst spelled out a typical quiet Friday at the office.
And then we looked at how much money you make, how many hours you work, and what you actually do as you move up in the corporate finance career path.
Today, though, I’m going to walk you through the downside case: what happens during a busy period for an FP&A manager, where you have to field tough questions from your CFO and CEO and everyone in between as you work on the infamous 3-year strategy plan.
While this never quite reaches investment banking hours, you’ll go far beyond a standard 40-50 hour per week job during this time – and you’ll get to have some fun dealing with office politicking.
Let’s get started with Monday at 8 AM, as I arrive at work…
8:00 AM – Elevator doors open, and I enter the finance floor and start my computer and check my emails.
As the manager of the financial planning and analysis team, I had the full weekend off, but my team was in the office preparing files. This week we are submitting the “Three-Year Strategic Plan” and, as always, it’s going to be hectic.
9:00 AM – First team meeting in my office. I brief the new members of the team on the schedule for this week, knowing very well that a thousand different events could completely change the schedule:
- Tuesday: Since we serve as the European headquarters, we’ll get all the countries in Europe pitching their three-year plans to us.
- Wednesday: We’ll consolidate the plans, make some modifications, ask questions and present it to the board of the European Division.
- Thursday: I fly to Germany with the CFO and one analyst to present the plan to the world headquarters.
- Friday: We answer a few questions and go home for the weekend… hopefully!
10:20 AM – The CFO enters my office. She is, without a doubt, the one person that is going to mess up the process. It’s her first planning session here, but she has a reputation for being very whimsical and changing things at the last minute.
10:25 AM – Here it comes: after a polite chat, she asks me to create an additional strategic plan based on a document that was created by consultants a few weeks ago.
I explain that their work was ridiculous and unrealistic, so it doesn’t make sense to use it for our planning. She agrees, but tells me to do it anyway since we “committed.”
I know exactly what happened: the worldwide CEO suggested it casually and our CEO for Europe said he would get it within 48 hours… and my team was going to suffer the consequences.
11:00 AM – Go see my most senior analyst and tell her the bad news. She’s been here for 4 years and she is the pillar of my team – plus, her crooked sense of humor is always a good morale booster.
1:00 – 3:00 PM – Sit down with my 3 senior analysts and review the files they prepared over the weekend. They created huge Excel templates that are ready to be filled out by the 10 European countries we manage.
We go over the different metrics like the Return on Investment, Return on Equity, and debt ratios.
To learn more about these metrics, please see our tutorial on ROIC vs ROE and ROE vs ROA.
We also cover them in detail in our Excel & Fundamentals course:
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I suggest a few changes on the main dashboard that we’re going to present to our CEO and the rest of the board on Wednesday. Right now it looks a bit too technical and “financey” and I know they’ll want something more sales and marketing-focused.
3:00 – 4:00 PM – Have a conference call with the 10 FP&A managers in Europe who report to me, to walk them through the template they have to pitch tomorrow. This is what I usually call a “complain call” because everyone is criticizing the format, the amount of data required, etc.
My analysts make a few adjustments and send the final file. It’s going to be an all-nighter for at least 30 people because they have to fill in 3 years of financials quarter-by-quarter.
4:00 – 7:00 PM – After the global conference call, I get on the phone with all of the FP&A managers one by one. We have a pre-pitch where they informally present their plans and, most importantly, the Net Income target for each year.
I know the global target our CFO has in mind, so I play a game of give and take to make sure the plans we get tomorrow are not too far off. In corporate finance, these pre-calls are the most important parts and the official pitches are just formal approvals.
7:00 – 9:00 PM – Meet with the European HR Manager and our CFO to discuss the “Cost Rationalization Plan,” which is a nice way to say that some people will lose their jobs.
I need to get an update on the forecast because not only are we presenting a full set of financial statements and enough performance metrics to make a small country jealous, but we’re also presenting the number of employees, their compensation, bonuses, and their satisfaction scores on the company survey.
This plan is going to be ugly, especially for the back office functions.
9:00 PM – Close my computer and realize the last person in the office is our new intern. He started last week and I know there’s no way he’s working on anything important right now. I walk up to his desk and tell him to go home because there’s no “face time” here.
8:00 AM – Walk into the office thinking about the day ahead. I’m definitely not looking forward to the 8 hours of calls with the various FP&A managers and CFOs that will present their three-year strategic plans today.
8:30 AM – All of my team members are in my office and I give them a final warning: no one at the country level knows about the headcount reduction plan and I don’t want anyone in my team to bring it up by mistake.
It would be a shame for a CFO to learn through an intern that 30% of his team is going to get the axe.
Today is all about comparing the three-year forecast for each country to the information we have and their previous plans. Anything that looks dodgy will be questioned because I don’t want anyone to keep Net Income away from me.
9:00 AM – We all sit in the executive room, ready for battle. I am next to the CFO and 2 of her analysts; my team of 10 all have their laptops opened, ready to provide us with “live” analysis.
10:00 AM – The first call was from a small platform in Eastern Europe and was quite uneventful – very few questions were asked and only minor corrections were made. That’s less work for my analysts.
11:10 AM – The FP&A manager for Hungary announces Net Income for this year €10 MM below my expectations. My analysts tell me this is because they set aside a reserve for a litigation case.
I ask for a legal memo to back up this reserve, but they say the memo is not ready yet. This sounds like a “cookie-jar” – a fake reserve created to hide income that can be released if you’re short of your target.
Just like companies often “sandbag” their estimates to reduce investor expectations and give them a cushion if something goes wrong, individual divisions of a large company often do the same thing.
11:30 AM – After a heated debate, I allow them to keep the reserve but I’ll be the one deciding on the timing of the release. That €10 MM is now mine and will help me to reach my target. I congratulate the team on a good catch.
This all falls in a grey zone of accounting, especially since it’s a strategic plan and we’re not booking anything. So if no one calls you on it, these “buffers” are considered fair game (these types of fake reserves are NOT allowed in publicly filed financial statements, though).
12:00 AM – We spent one and a half hours with Hungary, which means that now we’re running behind schedule… it’s going to be a long day. Since we’re late, lunch boxes are ordered directly into the meeting room and we eat while listening to the pitches.
1:00 PM – Italy is on the line, and the mood brightens because they are so much fun. The FP&A manager of Italy is presenting a plan €20 MM below our Net Income expectations. He’s going into great lengths about how bad the economy is in Italy, and how tough the competition is.
1:10 PM – I remind him that at the last planning session they said they could never, ever make up the extra €10 MM I was asking for, but then they ended up doing an extra €25 MM. He swears that this time it’s different. I ask for a resubmission anyway with an additional €20 MM.
1:30 PM – I really suspect that Italy has massive hidden reserves, which means I need to pick the right Net Income target for them. Too low and they won’t have to use the reserves to make it; too high and they’ll keep the reserves for next year when the target is do-able again.
3:00 PM – The German analyst tells me that his revenue growth is low because he used a 0% GDP growth assumption “to be conservative.”
Except he didn’t actually enter a “0%”, but instead left the line completely blank – it’s a rookie mistake and I know his boss is probably crucifying him.
You’re not supposed to make your own assumptions for important numbers like this – imagine what would happen if every division used different assumptions for GDP growth or inflation.
Instead, the world headquarters sends out “assumption packs” with projected growth for each country that everyone uses.
5:00 PM – I’m bored. All the pitches start to look the same after the first five countries have finished. I stay focused, though – need to catch those juicy hidden reserves!
9:00 PM – We finally leave the room after a 12-hour conference call marathon and the day is… not over.
9:05 PM – While going back to our floor, one of the interns asks me why the CFO is so involved in all of this.
The answer is simple: her bonus.
It’s based almost entirely on the Net Income of the business against the strategic plan. Someone at her level at a company of this size might earn around a $500K USD bonus, so it’s in her interest to sit through these boring calls.
10:00 PM – We received resubmissions from all the countries and consolidation is starting. Everyone on my team is working in Excel, but no analysis is required yet so I’m pretty much useless. I order pizzas for everyone.
11:00 PM – Consolidation is over for the Net Income, my priority. I sit down in my office with the 3 senior analysts and give directions on “the story.” This story is going to explain why this plan makes sense compared to the previous strategic plans.
For instance, we are € 30MM below the previous plan for Net Income. This is mostly due to foreign exchange effects with the British pounds and the Euro, so I ask my team to prepare 4 or 5 slides showing the different FX movements, the hedging we used, and the future assumptions.
1:00 AM – Leave the office and force the interns out. The analysts are going to work on the slides and we’ll review them tomorrow morning. I’m useless during the pitch creation phase and so are the interns.
8:00 AM – Two of my analysts stayed up all night. I see them leaving on my way in. They’re going home to shower and get some sleep before the big review with the European Board of Directors this afternoon.
8:30 AM – The 3 senior analysts arrive in the office; they left at 3:00 AM yesterday to be “fresh” this morning and are ready to review the slides.
9:00 AM – We start the review. I only focus on the content and not on the formatting because I know that our CFO is going to change it all anyway.
I’m not happy with the “flow” of the slides; they don’t explain well enough how the new, lower Net Income target is not our fault.
Blaming external events is the bread and butter of FP&A, so we change the order of the slides to support that and also add a few extra pages about the potential new markets we want to conquer.
10:30 AM – The changes are done and, looking at the pitch, I’m quite proud of my team. I know that this initial version is will be changed 30 times before the end of the week!
11:00 AM – I walk into the CFO’s office with my most trusted analyst. This is my first real pitch review with our new European CFO, and I’m a bit worried about her micromanagement of the slides.
12:00 PM – I was right: it’s been one hour and we’ve only discussed formatting, wording, and colors.
This is something a lot of CFOs do in their early forties, especially when they transition from FP&A or Corporate Development: instead of guiding the team on the story and analysis, they focus on the formatting because it’s a safe place for them.
12:30 PM – My analyst is trying to hide a severe case of the giggles. The CFO made us change the order of the pages so much that we have no idea of what the final pitch should look like anymore. I’m more annoyed than amused because there’s no way we’ll get this right before 2:00 PM.
1:00 PM – Back to my office. While my analysts are trying to put the pages in the right order with the right colors, I make a few phones calls to the UK Financial Planning & Analysis Manager. I need some additional pages to explain local movements on the FX side, and I need them within the hour.
1:45 PM – Phone rings. The CFO asks me to add a few metrics to the pitch, which are, of course, the same metrics she asked me to take off 2 hours earlier. I let the analysts know.
2:00 PM – Walk into the boardroom. The CEO and CFO are already here, so I sit by them. I know they’re working on a big deal, selling off one of our platforms in Eastern Europe, and they look pretty tired.
2:10 PM – The rest of the board walks in: the Chief Marketing Officer, the Head of Human Resources, and the Chief Operating Officer. Since the European division is not a legal entity we don’t have external directors, so we should probably call it a “Board of Managers” instead.
2:15 PM – The CFO makes an intro on the state of the different markets. She was the investor relations leader a few years back, so I must admit she’s pretty damn good at that.
The CEO follows with the big sales challenges and the different acquisitions and dispositions in the pipeline. The Head of HR and Chief Operating Officer give an update on the headcount reduction plan, which is just around the corner.
3:00 PM – We move on to the financials, so it’s my turn to jump in. I start with the overall European division forecast, the different metrics, and the almighty Net Income. The CEO interrupts me.
“Yes, very good, the Net Income 2 years from now looks impressive, but what is your forecast for the next quarter?”
I answer and try to go back to my pitch.
He interrupts again.
“Are you absolutely sure we’ll make it?”
I know why he’s so agitated about the issue: last year we announced € 450MM for the following quarter and missed by € 70MM because several big contracts fell through.
The CEO received a thorough grilling on that from his boss (a C-level executive for the company as a whole), which didn’t help his reputation.
3:10 PM – I go into full reassurance mode and show a detailed slide on how we are 100% sure of making the target next quarter. The CEO looks relieved. I start presenting the details, country by country, and the metrics go through another round of edits.
4:00 PM – I’m done with my part. I noticed during the presentation of the financials that the CFO was not looking at the strategy and the big revenue drivers – she was just adding up all the numbers in the slide to see if they matched.
This is a nasty habit some CFOs have, and it tends to cascade down the ladder – when my team presents a slide to me, I do the same to make sure she won’t find anything.
4:05 PM – Try to exit the room before I get more changes to make, but I’m not fast enough. The CEO asks me about the consultants’ strategic plan and how the financials look. I know I’m trapped, so I just say that I’ll come back to him on the issue today.
4:30 PM – Go back to the finance floor. I divide my team into 2 groups: one group is going to make the changes requested by the board and provide further analysis on some IT costs that I’m not completely comfortable with. The second group is going to work on the consultants’ strategic plan.
It’s hard to keep your team motivated when they know they’re working on a CEO’s whim: they’re creating a full set of financials for a plan that might as well be a fantasy novel.
I’m upfront with them and don’t even try to pretend it’s useful work – I just promise that we’ll spend as little time as possible on it.
7:00 PM – The “real” pitch is done and looks pretty good. All my team is now working on the consultants’ version.
9:00 PM – The team presents a first draft of the consultants’ financials. It looks completely unrealistic, but if that’s what the board wants, they’ll get it! The CEO comes down to have a look. I introduce him to the new interns.
9:30 PM – Review of the financials is over. CEO tells us that it looks too weird and that we can’t use it for anything.
Based on the consultants’ assumptions, in 5 years every single man, woman, and child (and even a few unborn babies) in Europe will have insurance contracts through our company. Yes, over 100% market share – why do we pay consultants so much again?
As expected, we throw the consultants’ plan away.
10:00 PM – The CFO comes to my office and we go through the pitch together one last time while eating some sandwiches. I sent my entire team home, which means I have to do the last round of edits myself, just like old times.
11:00 PM – Hit the company’s gym for a quick training session. I normally go 4 times per week, but during planning sessions I consider myself lucky to go once!
12:00 AM – Arrive home and go to bed.
These 3 days are typical of Corporate Finance planning sessions or closing periods. In the next part, we’ll cover the Thursday to Friday period – in which I fly to Germany to present the plan to the global headquarters!
Any questions on the corporate finance lifestyle or the daily tasks? Ask away in the comments below.
A Week in the Life of a Corporate Finance FP&A Manager – Series:
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