FP&A / Financial Modeling

Service description

FP&A and financial modeling turn a business's past results into a plan. A provider builds a budget, a forecast and a model that tests scenarios, such as hiring, pricing or a fundraise, and often sets up a regular rhythm for updating them against actuals. The output helps owners, boards and investors see where cash and profit are heading.

Common industries

Applies to any business planning growth, a raise or a budget cycle, especially startups.

ROI

A good model turns guesswork into scenarios you can act on; surge capacity for board decks, fundraises, and planning cycles.

Benefit

Build budgets, forecasts, and financial models — and the ongoing FP&A rhythm — to plan and steer the business.

Why get it

A model shows how much cash a plan needs, and when, before the money is spent. Investors, lenders and boards expect projections built on explicit assumptions.

When you benefit

Often a one-time build for a raise or annual plan, then updated monthly or quarterly as actuals come in.

What it costs

Typically a project fee.

When you pay

A model build is usually quoted as a fixed project fee, scaled to its scope and the number of scenarios. Ongoing FP&A support is typically a monthly retainer or hourly, with updates before board meetings or fundraising priced separately.

Other costs

Planning or spreadsheet software licenses, and access to the accounting system and data sources the model draws from.

Risks to know

A model is only as good as its inputs: bad actuals, unstated assumptions or broken formulas produce confident but wrong numbers. Projections shared with investors that prove unrealistic can damage credibility, and a plan built on an inflated forecast can leave the business short of cash.

When risks arise

Formula errors and weak assumptions often show up when actual results diverge from the forecast, within a few months. A cash shortfall built into the plan may not appear until the period it was forecast.

The process

The provider reviews historical financials and the business's plans, then builds the budget and forecast on documented assumptions. The business reviews the drivers and scenarios and corrects them. The provider delivers the model with a walkthrough and, if retained, updates it against actuals each period.

Your commitment

The business shares its financial statements, key operating numbers and plans for hiring, pricing and spending, and names who owns each assumption. It should make time for review sessions, since the model reflects management's judgment.

Documents to gather

• Financial statements for recent periods
• Current budget or prior forecast
• Headcount plan and key operating metrics
• Pipeline, pricing and cost assumptions

Helpful reading

• Financial Modeling Explained: Uses and Techniques — Investopedia
• Forecasting: What It Is, How It's Used in Business and Investing — Investopedia
• Mastering Your Finances: Exploring Budgets and Debunking Myths — Investopedia