This Statement on Management Accounting (SMA) by Lawrence Serven, an internationally recognized authority on enterprise performance management (EPM) and Kip Krumwiede, CMA, CSCA, CPA, Ph.D., director of research for IMA, provides 12 principles on financial planning and analysis (FP&A) as well as how to prioritize them. It looks in-depth at what the best-run organizations do differently with FP&A. Also discussed is the role of technology, the competencies needed, how to get started, and how to “sell” the need for FP&A improvement to top management.
The report begins with fundamental principles, then shifts to other principles that help foster a culture of accountability and effectively integrate key business drivers into FP&A. but effective FP&A is so much more than accountability and key performance indicators. The people side of FP&A can make any management accountant a more valuable strategic partner. Key skills include understanding the business, building effective relationships outside of finance, and communicating results effectively. And before any improvements are made, it may be necessary for the financial professional to sell upper management on the value of improved FP&A. This SMA provides a detailed and innovative way of doing so.