In my articles on transformation of finance role and the recent article on finance personnel embarking another role of gathering and analyzing the financial competitive analysis, I again now touch on another critical mass of finance role which is financial planning.

Gone are the days, when keeping the books of account accurately and the timely submission of the financial report to your boss completes your whole cycle of your financial role.

What really is financial planning? What is the contrast with accounting?

To say simply and

If I  may say so, when you are involve in the accounting aspect, you are only a “historian”, you take care of the aftermath of events in the business which culminate into the financial figures you are churning out.

Whereas, financial planning is an area where you are “crystal gazing” or forecasting before the financial result is out. Of course, you need to ensure that the actual compared to forecast should be much closed. Normally, the variance should be plus minus 3-5%.

Hence, financial planning (crystal gazing) is the forward planner whereas the accountant (historian) will pick up all the actual financial transaction and translated into financial accounting reports.

In a multinational organization, this role is segregated with the presence of a financial planner and an accountant to take on different role.

However, for most of the organization, the accountant is the one doing both. Hence, because of this so called crammed up of work and manpower limitation, financial planning role has never been able to be fully appreciated by the financial accountant.

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