Every Company Should Expect Three Functions from its FP&A Team
Based in Hong Kong, Danny Shiu has been with the finance department of a major food production company for more than 20 years, while also pursuing many other areas of interest that have taken him all over the world.
Like many financial professionals, he wasn’t looking for a career in FP&A. But once he found it, it turned out to be his true passion. That ultimately led him to seek out the AFP's Certified Corporate FP&A Professional credential, which was exactly the right designation to help him advance his career.
We recently spoke to Shiu about his career and how the FP&A function has evolved over time.
AFP: Let’s begin by talking about your background.
Danny K. Shiu: I graduated from UC Berkeley with a degree in Business Administration and have 20 years of finance experience within the Consumer-Packaged Goods (CPG) industry. As a corporate consultant, I currently hold both the FP&A and Microsoft Office Specialist Expert designations and recently started my study for CTP. Outside of work and study, I have participated in various volunteer services and in 2018 was the executive producer of a musical film in Chinese honoring the first Catholic saint of Hong Kong, which eventually won awards in Rome, Warsaw and St. Petersburg.
AFP: How did you first get into financial planning and analysis?
Shiu: I was not particularly looking for a career in FP&A when I just came out from school in 2000. At that time, many college graduates were crazy about technology start-ups. However, I felt that these kinds of new companies might not be able to give me the experience that I was looking for. Through a loose connection of people in my life, I luckily had my resume placed in the hands of a finance manager of a San Francisco-based food production and distribution company with over 100 years of history. That was my first time I saw the power of interpersonal connections. Then, I was hired by that company as an associated financial analyst, consolidation in its finance department.
Lately, I found my passion in FP&A, and I think I owe it to all my managers, and really, all my superiors. All of them have taught me a “can-do” attitude and demonstrated to me how to guide our corporate partners to spend within the budget, approve funding for new ideas, and estimate where the company will land financially by utilizing meaningful reporting, Excel modeling and business sense. I was comfortable with being embraced by this professional atmosphere while I was developing my business skills. Thus, I decided FP&A was the right career field for me. On the other hand, I am happy to have witnessed a part of FP&A’s emergence in the last two decades. When I had just started my first job, the finance department was called ‘marketing finance support.’ Then, it was renamed ‘internal reporting/financial analysis,’ and finally, about ten years ago, the department began to use the name ‘FP&A.’
AFP: What made you decide to earn the Certified Corporate FP&A Professional designation?
Shiu: I have always been looking for an opportunity to earn a professional designation which can help me to advance in my career. I first found Certified Management Accountant (CMA) sponsored by IMA and after studying for it for two months, I realized that the exam focused more on accounting rather than corporate financial analysis. Even so, I had thought CMA was already the closest designation to my profession until this year when a friend of mine told me about FP&A designation. First of all, AFP is a worldwide professional society with a long history and high reputation.
Moreover, I was very excited when I learned that AFP has a set of professional standards and a professional designation solely designed for FP&A. I think people working in finance departments should consider FP&A even if they have other accounting designations. I especially appreciate that the FP&A exam includes three important aspects: theories, usage of Excel in financial analysis, and the appropriate steps to do in order to deal with various business scenarios, which FP&A professionals encounter every day. Therefore, I decided to choose FP&A over CMA as there is no other comparable designation that give me this almost-tailor-made professional training.
AFP: How has the certification helped you advance your career?
Shiu: Even though I just earned FP&A a month ago, I have already seen myself grow. I am still able and motivated to learn at my age. Studying FP&A provided me with a great deal of satisfaction. I decided to target the CTP right after I passed the FP&A exam. I strongly believe, with these two world-class designations, my company sees me as a valuable asset, and I will reach another peak of my career life.
AFP: Have you encouraged your peers to earn the certification?
Shiu: The very next day after I earned my FP&A, I shared the good news with my manager. He shares my enthusiasm and high regard for this certification. I also wrote to AFP’s Asia-Pacific office thanking them for approaching me right after I downloaded the candidate handbook. I went on to express that if they plan to promote FP&A in Hong Kong where I currently reside, I would be more than happy to help as Hong Kong holds a large pool of financial and accounting talent in the region.
AFP: What would you say that every company should expect from its FP&A team? What does an FP&A department need to be to the rest of the organization?
Shiu: Based on my observation in my 20-year experience, I would say that every company should expect three functions from its FP&A team:
- Strong accounting knowledge: Similar to the accounting team, the FP&A team should be able to generate P&L for bottom-up budget planning and for topline forecasts. This is the benchmark that management will rely on when making important decisions.
- Interdepartmental communication skills and quality control: As the FP&A team needs to generate P&L, they have to get assumptions from various departments (e.g. volume from demand planning and sales; cost from supply chain; marketing expense from marketing; G&A from department heads, etc.) in a timely manner. Also, the FP&A team serves as the QC (quality control) of the assumptions provided from other departments. They always ask questions if they are not satisfied with the assumptions provided to them and will continue to ask if they are still not satisfied.
- Excellent Excel skills: Besides running regular forecasts in the company’s financial information system, the FP&A team often utilizes financial modeling in Excel for regulating analyses, ad-hoc estimates, and even long-range plans. Therefore, I can safely claim that in many companies, you can find the employees who are the most proficient in Excel in their FP&A teams.
I will share my experience. I’ve always been glad that all my managers have offered me many opportunities to develop my Excel modeling and building skills since day one, which are integral to my daily challenges. To further my expertise, I keep my Microsoft Office Specialist Expert license current so that I always possess the most up-to-date Excel skills. Nowadays, I always find it is a pleasure when my colleagues come to me for suggestions regarding Excel and other financial analysis inquiries. I can honestly tell you that when I am asked most of the questions, I diligently check my resources for a solution. I think the skill of knowing how to find a solution is critical because no one has all of the answers to all of the issues. I believe this compulsory skill truly helps me to be an ethical and professional corporate FP&A.
Interested in becoming a Certified Corporate FP&A Professional? Learn more here.