S1E3: You can never have enough cash in your business. The best founders are the ones who are engaged with others. Copy 2
In this Podcast, Greg Capitolo and Albert Gozzi dive deep into the work of Fractional CFO related work
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Part 1: How we got here
For decades, finance and accounting teams worked behind the scenes, focused primarily on bookkeeping and transactional reporting. Being confined to the back office often meant that finance professionals were less visible and, at times, undervalued relative to their revenue-generating peers.
Dismissively labeled “bean counters,” their repetitive tasks and meticulous attention to detail were seen as essential but lacking much strategic value. However, this seemingly mundane work of tracking every penny spent and earned by a business laid the groundwork for a profound transformation.
So, what was the catalyst that catapulted finance from back-office bean counting to transformational business strategy? Several factors are involved, but none were more impactful than advancements in technology.
Setting the foundation (1970 - 1990)
The 1970s marked the dawn of the digital age, and with it, a wave of innovations that changed the landscape of finance. The first spreadsheet program, VisiCalc, launched in 1979, was followed by Lotus 1-2-3 in 1983 and Microsoft Excel in 1985.
By the end of the 1980s, mass-production computers and basic spreadsheet software had become commonplace in most offices, finally giving finance some breathing room to peer over their stacks of paper invoices.
More sophisticated multi-dimensional modeling software, like those introduced by IMRS (later known as Hyperion) was also beginning to emerge. These technologies, while out of reach for the vast majority of businesses due to their significant cost and complexity, set the foundation for FP&A’s continued ascent.
The birth of modern-day FP&A (1990 - 2010)
While FP&A started taking shape in the previous era, the 1990s marked its true emergence as a distinct discipline. Although traditional accounting was still primarily responsible for preparing budgets and financial statements, the need for more advanced planning and analysis was increasingly evident.
The next wave of technological advancements, including personal computers, the internet, and data analytics tools, equipped finance professionals with a more robust toolkit. Armed with more data and the means to analyze it, the modern-day FP&A role was born.
Real-time data integrations revolutionized financial models in the 2000s, making them more reliable and accurate. Teams could now provide senior management and the C-suite with the insights needed to make smarter, faster decisions.
More and more companies started catching on, but FP&A was still far from mainstream adoption. The software and data integrations existed but were still expensive and time-consuming to implement. It was a nice-to-have, not a need-to-have...until markets imploded in 2008.
Awakening and early growth (2010 - 2015)
The Great Financial Crisis was a wake-up call. As companies sought to recover and build resilience, they began to recognize the pivotal role FP&A could play in reaccelerating growth and weathering the next storm.
This awakening began an exponential rise in awareness and demand for FP&A services. Just look at Google Trends—it reveals a tenfold increase in search interest for "FP&A" since 2010, mirroring its increasing prominence and permanence in the business world.
FP&A had evolved into the engine room of a business. Instead of just keeping track of financials and setting budgets, they were now tasked with creating precise forecasts, aligning teams, monitoring progress, and supporting strategic decision-making—and the list of responsibilities would continue to grow.
Organizations big and small realized that financial planning and analysis was now a necessity rather than a luxury, and began to ramp up investments in their FP&A capabilities.
The finance department has undergone a dramatic transformation in recent decades, fueled in part by the widespread adoption of financial plcanning and analysis (FP&A). It’s been a winding road to get to this point, but today, FP&A teams have solidified themselves as a cross-functional strategic asset for most midsize to large businesses.
Understanding the past to predict the future is the core ethos of FP&A. With this in mind, we dove deep into FP&A’s evolution through the years, tracing its journey from humble beginnings in the back office to its current status as a critical value-driver for modern businesses.
Part 1: How we got here
For decades, finance and accounting teams worked behind the scenes, focused primarily on bookkeeping and transactional reporting. Being confined to the back office often meant that finance professionals were less visible and, at times, undervalued relative to their revenue-generating peers.
Dismissively labeled “bean counters,” their repetitive tasks and meticulous attention to detail were seen as essential but lacking much strategic value. However, this seemingly mundane work of tracking every penny spent and earned by a business laid the groundwork for a profound transformation.
So, what was the catalyst that catapulted finance from back-office bean counting to transformational business strategy? Several factors are involved, but none were more impactful than advancements in technology.
Setting the foundation (1970 - 1990)
The 1970s marked the dawn of the digital age, and with it, a wave of innovations that changed the landscape of finance. The first spreadsheet program, VisiCalc, launched in 1979, was followed by Lotus 1-2-3 in 1983 and Microsoft Excel in 1985.
By the end of the 1980s, mass-production computers and basic spreadsheet software had become commonplace in most offices, finally giving finance some breathing room to peer over their stacks of paper invoices.
More sophisticated multi-dimensional modeling software, like those introduced by IMRS (later known as Hyperion) was also beginning to emerge. These technologies, while out of reach for the vast majority of businesses due to their significant cost and complexity, set the foundation for FP&A’s continued ascent.
The birth of modern-day FP&A (1990 - 2010)
While FP&A started taking shape in the previous era, the 1990s marked its true emergence as a distinct discipline. Although traditional accounting was still primarily responsible for preparing budgets and financial statements, the need for more advanced planning and analysis was increasingly evident.
The next wave of technological advancements, including personal computers, the internet, and data analytics tools, equipped finance professionals with a more robust toolkit. Armed with more data and the means to analyze it, the modern-day FP&A role was born.
Real-time data integrations revolutionized financial models in the 2000s, making them more reliable and accurate. Teams could now provide senior management and the C-suite with the insights needed to make smarter, faster decisions.
More and more companies started catching on, but FP&A was still far from mainstream adoption. The software and data integrations existed but were still expensive and time-consuming to implement. It was a nice-to-have, not a need-to-have...until markets imploded in 2008.
Awakening and early growth (2010 - 2015)
The Great Financial Crisis was a wake-up call. As companies sought to recover and build resilience, they began to recognize the pivotal role FP&A could play in reaccelerating growth and weathering the next storm.
This awakening began an exponential rise in awareness and demand for FP&A services. Just look at Google Trends—it reveals a tenfold increase in search interest for "FP&A" since 2010, mirroring its increasing prominence and permanence in the business world.
FP&A had evolved into the engine room of a business. Instead of just keeping track of financials and setting budgets, they were now tasked with creating precise forecasts, aligning teams, monitoring progress, and supporting strategic decision-making—and the list of responsibilities would continue to grow.
Organizations big and small realized that financial planning and analysis was now a necessity rather than a luxury, and began to ramp up investments in their FP&A capabilities.
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