Revenue: The Next Frontier for FP&A Data

Revenue. It’s more than a function or a top line. It’s the next frontier for finance data.

The finance function has come a long way in the last 20+ years. Especially as it relates to data; what I’m going to focus on today.

Only a couple generations ago, finance and accounting were two distinct silos within the office of finance. Not the two sides of the same function we see today.

They dealt with different systems. With different data Handled by completely separate teams, meeting only when it came to quarter end reporting. And even then, reported numbers were almost certainly trailing by at least a couple weeks.

Then came networked computers, the internet and (at the time) modern ERP systems. These broke down the silos within finance and gave the whole team - FP&A especially - access to near real time numbers, not just reports from the last quarter.

Next came SaaS software that integrated finance and accounting systems directly or close to directly from their sources. FP&A could do rolling forecasts on the fly. Reports could be compiled in days or even hours.

After that came integration with payroll, bank, recs, inventory and more and more information. Operational as well as financial.

Silos were falling all around finance. All around the organization, really.

But a gap remains, the next frontier for FP&A, and that’s revenue data.

For one reason or another, real revenue data remains siloed from FP&A. Sure sales, marketing and revenue leaders provide their expenses and sales numbers during budgeting, planning and forecasting, but that's largely the extent of it.

Sales and marketing have an entire pipeline full of rich, untapped data that could be a finance’s disposal - with significant impacts on business planning.

Consider KPIs like close rates, sales velocity, customer health, even lead conversion rates of different marketing channels. These all offer a wealth of intelligence and rich data sets ripe for analysis in FP&A. Even more so with the advent of AI-powered FP&A software.

And the further up the pipeline you analyze, the more leading indicators you’ll have for more accurate, agile forecasts.

Are you using all the revenue data you could be in your FP&A? How…or why not?

Does your ERP or budgeting software allow it? If not, you may need to reevaluate FP&A solutions on the market today.