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5 Steps to an Effective FP&A Client Meeting

Mike Triantos
Posted by Mike Triantos on Apr 19, 2023 2:18:36 PM

As you start to incorporate Financial Planning & Analysis (FP&A) into your advisory services, you might feel uncertain about how to leverage the models and information in client meetings. The truth is that FP&A client meetings depend heavily on the client. That’s why the kick-off meeting is so integral to the process.  

We’ve set up a framework for an FP&A client engagement that works and is easily repeatable. By following these five steps, you’ll learn more about your client and how to leverage FP&A to deliver maximum value.

Step 1: Listen and learn 

The first step in a successful FP&A client engagement is getting to understand the trajectory of the client and the business as a whole. This is done in a 3-step process.  

First, you ask them about where they’ve been. What has the business experienced in the past? Why was it started? What were their goals at the time?  

Second, you ask them about where they are. What are their monthly operations like? Are they profitable? How confident in their finances do they currently feel?  

Third, you ask them about where they want to head. Where do they see themselves in a year? What are their short and long-term goals?   

With these three points, you can map out a general trajectory of the business. Think of these three steps as placing 3 points on a graph, and it’s your job to figure out if a line can be drawn through them. 

Beyond the framework of the business, you also learn more about what motivates your client, what difficulties they face, and why they want your help. It sets the foundation of your relationship both professionally and personally. 

Step 2: Build the model 

Once you have a deep understanding of the goals and direction of your client’s business, it’s time to map those expectations out in a financial model.   

A great tool for providing context to your conversations is a driver-based financial model.  

With a driver-based model, you’re building out a 12 to 24-month forecast, mapping the client from where they are now to where they are hoping to go. The key analysis then is identifying which 3-7 main drivers are going to have the biggest impact on the results over that time frame.  

This model provides an essential framework for client conversations. Rather than having a meeting looking at many different data points and variables, you’ll drill down on these key drivers and easily diagnose the trajectory of the business.   

Step 3: Test against history 

Now’s the time to incorporate real-world information into the discussion. It’s time to look at the books. 

Look at the financial data and historical trends. This doesn’t need to be a deep dive, but you should be able to compare the outline of the business as told to you by the client versus reality. 

This is your opportunity to test some of your client’s assumptions. Let that be the jumping-off point for what you want to look at first. If they’ve highlighted certain expenses or talked about past revenue performance, that’s where you’ll want to look first. 

The process of bridging the gap between what the client believes is happening and what is actually happening kicks off the journey of educating your client based on your expertise and prior experience. 

Step 4: Realign to reality 

With historical information in play, you need to adjust the model to match reality. You are now showing the client an accurate picture of how their business has performed relative to the narrative that’s in their head.  

Each discrepancy between the narrative and the reality is an opportunity to educate. It’s time to feed the story you see in the financial reporting back to them in plain language to highlight any misunderstandings. Spend time highlighting the key business drivers that put them in the place they currently are. 

You can again tie this process back to their key drivers. If the expectation is for dramatic improvement, what has to happen for that to truly happen? Which drivers are going to have a major impact on the results?

Once you’re realigned on reality, set the working model to reflect the reality you’ve talked about. The model is now ready to be used to inform the client. 

Step 5: Leverage the model 

Equipped with a working model, you have the most powerful tool to inform your clients and guide their decision-making. 

Continue to build off of the momentum of conversations about the assumptions of the client. Now that these assumptions have been challenged, how does this impact the business strategies they already have in place? And how does that impact the timeline of their financial goals? 

This is the time to perform budget variance analysis. Armed with financial forecasts, you can map out the business’s financial future and how it’s shaped by present-day decisions. Your meetings are always within the context of the client’s goals, the financial model, and the actual results.   

The power of this communication is that you’re always looking forward. It’s not a quarterly summary of how things performed. It’s a steady review of the key drivers, which will tell you if the client is tracking toward their desired outcome. If they are off track, you’ll know via leading indicators what the data is going to say and can proactively communicate that changes will be needed in order to reach the targets.  

Start incorporating FP&A today 

The secret to a high-performing FP&A service is leveraging software to take care of all your financial reporting deliverables.  This frees up hours of work that can be devoted to FP&A meetings and delivering high-value, high-impact insights to your clients. Get started with a free demo of Jirav today. 

Topics: Financial Advisory


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