In this episode of What’s New at CFI on FinPod, we discuss the newly released course, FP&A Professional: Model Roll Forward and Analysis. This course is the second in a three-part series designed to enhance Excel skills while focusing on essential monthly workflows for FP&A professionals. Listeners will learn best practices for managing files, rolling models forward, and incorporating both quantitative and qualitative data to drive decision-making.

We also cover key strategies for improving forecasting accuracy and rolling models forward at the end of the fiscal year. If you work in FP&A or are looking to make a shift into an FP&A role, you’ll want to tune in for real-world tips & advice to help refine month-end workflows, enhance forecasting precision, and effectively incorporate qualitative insights alongside the data for more informed decision-making.

Transcript

Ryan Spendeow (00:13)
Hello everybody and welcome to this episode of What’s New at CFI. My name is Ryan Spendelow and I’m a Senior Vice President here at CFI. Today, I’m joined by my colleague Duncan McKeen, a fellow subject matter expert, and we’re here to talk to you about our new FP&A course and it’s called FP&A Professional Model Roll Forward and Analysis. Hi there Duncan. How are you today?

Duncan McKeen (00:40)
Around yourself.

Ryan Spendeow (00:42)
I’m doing really, really well, thanks. It’s always really good to have you on the What’s New podcast. This is a great course that you’ve been one of the driving forces behind releasing. Can you tell us a little bit about the course?

Duncan McKeen (00:55)
Yeah, the first thing about it is it’s a part of a series of three courses. So this is the second one in the series. And in the first course in the series, we’re really teaching everyone that’s in the course how to build this particular model template. So it’s really focused on heavy Excel use, learning lots of Excel skills. And in this one, what we’re focused on is more procedural. What do you actually do?

Every month, as you get new data and how do you manage your files and how do you roll the models forward each month? So we really want to try to teach a procedure for workflow that FP&A professionals can really incorporate into what they do each month.

Ryan Spendeow (01:40)
Sounds like an absolutely critical part of FP&A analysis and model building. So, I imagine it sits right at the heart of what an FP&A professional does. I imagine, as you’ve alluded to, that it’s a good idea to have a set procedure to follow each month for new actual data. So, what are your recommended procedures that we cover in this course?

Duncan McKeen (01:46)
Huh.

Yeah, definitely. Well, the first thing that we rec, let’s, let’s, I guess, start about what we don’t recommend. We definitely would not recommend, just using one model throughout the year and overwriting it as you go. because then you’re not, you’re not going to have, backup copies of everything for prior months. And then you wouldn’t know also, if you’re constantly overwriting things, then you wouldn’t know what your forecast was, say, two months ago. And sometimes, that can be interesting to go back and look at. So we’re definitely recommending like,

You know, the moment a new set of monthly data comes along, then we would make a copy of the previous month’s file, rename it. Usually you’re gonna rename it like, you know, like the, like incorporate the date at the end of the month somehow. Like if you’re gonna follow year month day, which is very, very common. So then you’d have like, you know, 2024, 6.30 for June 30th, and then you’d roll it forward to 2024, like say July 31st, so 7.31.

And that’s a great procedure to follow year, month, day. So that’s the first bit is constantly rolling it forward. And then what we’re going to do is basically show the learners how and where to put the data in and how to interpret it. And we want to, as we’re putting the data in, we want to be analyzing it in that moment. Because that’s the moment when you’re physically putting it in, you’re comparing it to what you thought it would be. So that’s the right time to be,

to be analyzing it, right, when you’re putting it in.

Ryan Spendeow (03:36)
Makes sense. And thinking about that data that you’ve alluded to there Duncan, do you only focus on quantitative data or information in these FP&A models or do you also incorporate qualitative data and information?

Duncan McKeen (03:40)
Ahem.

Yeah, it’s a great question. Definitely the tendency for people is to focus more on the quantitative data and really just the numbers. But what you’ll generally find, you want to think about your audience. It could be members of the executive team, members of the board. They want to know what’s underneath the numbers. They want to know, hey, what’s the story? What happened to lead to the numbers moving like they did?

You know, the qualitative information is definitely important and you definitely do not want to make mistakes in the quantitative information. But what we what we’ve done with the design of this model is we put a place for more qualitative information or like commentary. So beside each graph, there’s commentary about so you can write in exactly, you know, what happened. You know, perhaps you could say something like prices were lower than we expected because we’re really trying to penetrate the market and we needed those prices to get the volumes that we’re aiming for. So that

That’s an example of the qualitative storyline that the executive team will really want to understand.

Ryan Spendeow (04:55)
Yeah, I was going to say that qualitative information and data that you can add as an FBN analyst must be really useful to the decision-makers in your organization, right? And that’s where a real value add element comes to it.

Duncan McKeen (05:07)
Yeah, it sure is important. And also, you wouldn’t believe how many models there are that really don’t provide that qualitative information anywhere. It might come out in the conversations as you’re presenting the models, but we wanted to actually provide one piece in the model, like I said, right next to the graphs where you can put that and you should put that. So we’ve incorporated that in there. And again, that’s something that you would probably want to make that commentary,

like right in that moment where you’re putting in the numbers and analyzing and realizing what happened.

Ryan Spendeow (05:39)
Yeah, for sure, Duncan, that makes perfect sense. What do you actually do with the FP&A models at the end of each fiscal year? Presumably, you have to roll the models forward by a year?

Duncan McKeen (05:48)
Hmm.

Yep. Yeah, you definitely do. You roll them forward and what ends up happening is that, so like, let’s say that, well, actually it’s good timing because we’re approximately in the middle of 2024. So in that model, we will be right now forecasting 2025 and we’ll have 12 months of forecast for 2025. Well, as we get closer and closer to the end of 2024, we will have, you know,

honed in that forecast for 2025. So it’s getting better and better and better every month or closer to reality every month. By the time we get to the end of the year, that forecast for 2025 becomes our budget for next year, right? Because we’ve had 12 months of, you know, honing in, getting it closer and it becomes our budget. And then we want to, we need to index the years forward, but we also need to move

the forecasts, you know, like, for instance, what we were forecasting for 2026, well, that label will get moved now to 2027 and we’ll need to put a new forecast in there. So yeah, you definitely rolling it forward is probably the easy part, like just inputting a new number into the cell, that’s like the easy part, but you need to make sure to transfer everything properly so it’s lined up with the right labels. And then, you need to come up with one brand-new forecast for,

Ryan Spendeow (07:10)
Yeah.

Duncan McKeen (07:17)
you know, a brand new year that you’ve never forecast before. So it can be, so when you do get to the end of that year, it’s a little bit more of a time-consuming process, but I guess again, we wanted to walk the FP&A professionals through that, you know, so when they get to that stage in the year, again, it’s a procedural thing and they know exactly how to go through it without any hiccups.

Ryan Spendeow (07:40)
Gosh, listening to you describe the process, Duncan, it’s just a really good reminder about the modeling complexities that FP&A analysts are faced with, that perhaps other financial models aren’t so much. So again, a reason why a course such as this hopefully is so valuable to our learners.

Duncan McKeen (07:50)
Hmm.

Yeah, we really hope so for sure. They are complex models. They really are like monthly and like constantly rolling forward comparing what you thought it would be to what it actually is. A lot of complexity in there. Yeah, so I hope this resonates with them, of course, like this.

Ryan Spendeow (08:04)
Yeah.

Yeah, I’m sure it does, Duncan. So, thanks ever so much for joining us on this episode of What’s New at CFI. Just a reminder, Duncan’s been explaining our new course FP&A Professional, Model Roll Forward and Analysis. And it’s part of a three-course series. So Duncan, thanks ever so much for coming along in this episode. Hopefully you’ll come back and let us know about what the next course in the series is sometime soon.

Duncan McKeen (08:43)
Definitely, Ryan. Thanks so much.

Ryan Spendeow (08:45)
Awesome, all right then, take care and see you next time. Bye-bye.