The optimistic evolution of the FP&A function

Very few finance professionals today spend their entire career as entry-level accountants. But that’s how many start out—and it’s how the FP&A function began, too. The evolution of FP&A over the decades mirrors, in many ways, the evolution of an individual finance professional’s career. 

And the evolution that is happening right now may be the most promising one yet.

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It’s 1978. Evan just graduated with a degree in accounting and moved to New York—and he had never been more optimistic about a summer in his entire life. A mid-sized advertising firm had offered him a job on their growing finance team. His role? Shuffling numbers around.

Evan’s finance team mostly did bookkeeping: reconciling data, updating historical data, and reporting results. Lots of this, especially Evan’s entry-level work, was done with paper and pencil. The team was not expected to influence the strategy of the company or build detailed forecasts and models. In fact, if you had asked the person leading finance at this advertising firm “build a model”, they would have looked at you like you’d said the Mets had a real shot at winning the world series that year.

It’s true that Evan’s team was present and necessary. But it’s also true that they served as a back-office function. Useful, but invisible. And with no influence on strategy. That was okay with Evan, though, because all he was doing was entry-level bookkeeping anyway.

The story at Evan’s company was broadly true for most companies in the early and mid-70s, and the preceding decades. Without more powerful tools, individuals on finance teams did not have a particularly impressive amount of leverage. Even if smart finance people could dream up complex models that laid bare the equation of the business, they did not have the technology to build them. It might have even been frustrating. This was a common phenomenon. Before the explosion of software in the latter half of the 20th century, leagues of smart people across every field dreamt of the future: in 1922, Lewis Fry Richardson described computers modeling the weather as a “fantasy”. Finance professionals may have felt the same about software to help them model the reality of their company.

It would only be a year before everything changed.

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Just as he began to get his footing, Evan saw his role shift dramatically.

VisiCalc, the world’s first spreadsheet, was introduced in 1978. Excel came only a few years later. And in the decades that followed, a shocking number of powerful finance tools were released: Quickbooks, SAP, Hyperion. In the late ‘90s and early 2000s, we got NetSuite, Blackline, Anaplan, Oracle, and Workday—just to name a few. Of course, the FP&A function changed drastically as a result.

As Evan gained seniority in the company, the FP&A function was gaining more leverage across the company. Finance was no longer relegated to invisible number-crunching. Now the finance team had brand new capabilities: they could build models, run scenarios, forecast outcomes, and work with teams outside of finance. FP&A shifted from being reactive to proactive.

Instead of waiting for the month to close, finance teams started forecasting ahead. They modeled trade-offs. They influenced business strategy. The CEO of Evan’s advertising firm could come to the finance team and say: “How many more salespeople do we need to hire to hit our revenue target by EOY?”, or “What would the financial impact be of opening an office in Los Angeles?” And the team could, with some effort, provide real and useful answers. Evan saw his influence slowly growing.

By 2015, Evan was second-in-command to the CFO at his finance function. Compared to what his team was doing back in the ‘70s, FP&A had undergone a complete revolution. But if you’d asked Evan in 2015 if things were perfect, the answer would have been loud and clear: absolutely not.

That’s because things were not—and are not—perfect in FP&A. Even though we have more advanced financial tools than ever before, the work that finance people do still tends to be rather siloed. Other people at the company don’t quite get what all the spreadsheets do. Ask a marketing person or a designer to competently navigate their way around Anaplan (or even a complex Excel spreadsheet) and you’ll see what it looked like when finance people opened VisiCalc for the first time in 1979. This makes it hard for finance people to collaborate with teams across the company, because, well—if someone doesn’t understand what you do, how can you work hand-in-hand with them?

What can be said is that, in this recent era of FP&A, the finance team (particularly the CFO) has had more strategic leverage. They’ve been able to advise on the strategy of the company. But, for the most part? Finance teams have still been stuck in the trenches, doing work and generating insights that the rest of the company may not hear about—or pay enough attention to.

It’s at least a little strange that finance, even in recent years, has played such a supporting role. After all, finance is the equation of the business. It is one of the only real ways you can understand exactly how the business is performing and how different decisions will impact its future. Isn’t there a better way?

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It is 2025, and the FP&A function is changing once again.

Evan is now the CFO of the advertising firm he started working at nearly half a century ago. Yes, it’s perhaps a bit unrealistic. And yes, Evan should probably be thinking about retirement. But Evan is not real, and that means he can do whatever we need him to for this piece. So Evan, in his late 60s, continues to work. His day-to-day work feels worlds away from how he started out. 

And it is worlds away. In the ‘70s, even the CFO of Evan’s advertising firm would not have dreamed of the kind of work that the modern CFO does and the influence they have within the company.

Over the last couple of years, Evan has been paying attention—and he’s noticed a few important shifts. Data teams are now reporting into finance, making finance the source of truth throughout the company. And finance is being embedded across the organization: finance leaders sit in on product and engineering meetings; GMs and PMs are expected to understand how the business operates.

New software, like what we build here at Runway, is making finance understandable and accessible throughout the company. At some modern finance teams, even today, no longer is FP&A siloed. No longer does the rest of the company have to navigate an archaic, confusing finance software to understand what is going on. Increasingly, finance is becoming a universal language that anybody at the company can use to understand the business and make better decisions. PMs can build financial forecasts for their product decisions. Engineers can track the business outcome of infrastructure changes before deploying new code. And, of course, finance people themselves are gaining more leverage.

We believe that the future of FP&A is one where every person on the team acts a little more like a CFO. Where most of the tedious, manual work (i.e. reconciliation) is handled automatically, and each individual has more leverage to help with strategy. Where anybody at the company can use finance to help them make better decisions. If in 1978 you had told Evan that the future of finance would look this way, he might’ve been shocked (not even the CFO would’ve been doing this work back then!). But we’ve come a long way since 1978—and we expect to go a whole lot further in the near future.