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Your Fancy FP&A Model Is Only as Good as Your Accounting

AuthorAuthor

Ellen Köhler & Simone Rüschenberg
October 08, 2026 • Estimated Reading Time: 5 minutes

Read of the week

There is a funny hierarchy in many finance teams.

Financial Planning & Analysis (FP&A) is strategic. Business partnering is sexy. Corporate Finance is close to the CEO.

And Accounting? Well, they do the bookkeeping.

That attitude massively underestimates what good Accounting does. Every forecast, KPI dashboard, board deck and variance analysis ultimately starts in the same place: the books.

If revenue recognition is wrong, accruals are incomplete or the balance sheet is not properly reconciled, FP&A has a problem.

A forecast built on unreliable actuals isn't sophisticated. It's just a more complicated way of being wrong.

00· · In this issue

01· · Why Accounting is the foundation of your finance stack
02· · What your monthly close is a finance quality test
03· · Why controls aren’t just for auditors
04· · How FP&A can contribute to better actuals

01· · Accounting is the foundation of your finance stack

The flow is simple:

Business activity → Accounting → Reliable actuals → FP&A → Better decisions

Accounting translates what happened in the business into reliable financials. FP&A uses those numbers to explain performance and forecast what comes next.

Accounting goes far beyond bookkeeping. Bookkeeping records transactions. Accounting applies judgment to revenue recognition, accruals, provisions, cut off, capitalization, consolidation, reconciliations and controls.

These decisions determine how the economic reality of a business shows up in its financial statements. And that makes Accounting the foundation for pretty much everything else the finance team wants to do.

When the foundation is shaky, you usually spot it in FP&A quickly:

  • Manual “adjustments” and “normalizations” pile up in the model.

  • Someone keeps a separate Excel file with “the real numbers”.

  • Board decks need footnotes explaining why last month changed.

Those workarounds are symptoms. The cure usually sits in Accounting.

💡 Before improving your forecast model, make sure you can trust the actuals going into it.

02· · Your monthly close is a finance quality test

One of the easiest ways to assess a finance organization is to watch the monthly close.

Company A closes on Day 15.

Finance chases missing invoices, manually reconciles accounts and keeps posting late journals. FP&A starts analyzing, then starts again when the numbers change.

Company B closes on Day 5.

Responsibilities are clear, reconciliations are current, accruals follow defined processes and the team knows which checks happen when. FP&A gets reliable actuals early enough to focus on the story.

Speed alone is not the goal. A good close is fast, accurate and controlled and Finance can explain what happened when the books are closed.

The Close Maturity Curve

How to get from Day 15 to Day 5

Our older benchmark called 6 to 8 days acceptable. Expectations are moving: better tooling and automation are making faster closes increasingly realistic. The practical target for many teams should be five days or less.

The secret is that a five day close starts before month end.

Three rules matter most:

  • Set materiality thresholds. Do not delay the close for immaterial invoices or tiny expense claims.

  • Protect close days. Keep ad hoc requests away from the people doing the close.

  • Treat every month like a mini year end. Keep reconciliations current and year end becomes much easier.

Your challenge: time the next close, identify the three biggest time wasters and fix one before the following month.

💡 Closing faster comes from better processes, systems and controls, not from asking Accounting to work faster.

03· · Controls aren’t just for auditors

Good controls are simply mechanisms that help you trust your financial data. They answer questions such as:

  • Did we recognize all revenue and expenses?

  • Does the ERP bank balance match the bank?

  • Why did deferred revenue or gross margin move?

  • Who approved this manual journal?

A Month End Close (MEC) checklist should exist from the start. At a small company that may simply be a Google Sheet. As the organization grows, dedicated close tools such as FloQast or Stacks can integrate with the ERP, while newer AI-native ERPs increasingly build close workflows into the system.

The controls themselves should scale with the business:

  • ~30 employees: MEC checklist, bank reconciliation, payment approval and key balance sheet reconciliations.

  • ~300 employees: close owners and deadlines, material balance sheet sign off, journal approvals and a revenue recognition policy.

  • ~3,000 employees: risk and control matrix, segregation of duties, intercompany controls, group guidance and control testing.

Our rule of thumb: introduce controls one stage before you need them. Start with cash and revenue, where mistakes hurt most. Clear rules and ownership also make these processes much easier to automate later.

💡  Build controls that help Finance trust its own numbers long before an audit or IPO forces you to.

04· · How FP&A can contribute to better actuals

FP&A uses the numbers. It can also help make them better. In fact, FP&A is often closer to the business and hears about changes before Accounting does.

  • Be part of the MEC process. FP&A should review the first actuals against budget or forecast before the books are closed and challenge unusual movements.

  • Feed accruals and business context into Accounting. New contracts, reorganizations, bonus changes and large campaigns should be shared before month end.

  • Fix the books, not the model. If you repeatedly adjust an actual in FP&A, ask whether the correction belongs in Accounting.

  • Agree on definitions together. Gross margin, cost center mapping and recurring revenue should have one documented definition.

  • Give credit where it is due. A strong board pack starts with reliable actuals.

💡 The best Finance teams treat reliable actuals as a shared responsibility between Accounting and FP&A.

Bottom Line

FP&A needs reliable actuals. Management needs reliable reporting. Investors need reliable financials. And AI needs reliable data.

You do not need a transformation program to get there. A close calendar, a proper MEC checklist, monthly reconciliations, controls that fit your size and an FP&A team that works with Accounting will get you a long way.

Accounting is the foundation all of this is built on. And it deserves more respect in the CFO Office.

CFO Watchlist

Personio acquires Circula. The spend management market is consolidating.

  • Personio acquires Berlin-based spend management platform Circula, its largest acquisition to date. The price is undisclosed. Circula becomes "Circula by Personio" and stays available as a standalone product.

  • For finance teams, payroll, expenses, benefits and corporate cards move onto one employee record and one tax logic. That means fewer reconciliations between HR and Finance. The DATEV integration stays.

  • Expense tools used to sit next to the HR suite. Now they're being bought by it. Spend management is consolidating, so check your vendor's roadmap before your next renewal.

E-Invoicing becomes mandatory in 12 weeks. Are you ready for it?

  • From 1 January 2027, German companies with more than €800k prior-year turnover must issue B2B invoices electronically, in XRechnung or ZUGFeRD format. Everyone else follows in 2028.

  • Awareness is low: according to the German Confederation of Skilled Crafts (ZDH), around 90% of companies are affected, but 70% haven't completed the switch. The ZDH is even calling for a delay to 2028.

  • Don't count on it. Check now whether your ERP can send compliant e-invoices, and whether your customer master data is complete.

FROM SIMONE

CFO Summit: The New Era of Finance

12 November 2026 · Munich

The CFO Summit is where the Finance Collective community meets in person, open to any finance leader interested in the new era of finance. On the agenda: how the finance function, the tech stack and the CFO role are being reshaped.

WHO WRITES THIS

Two CFOs, two vantage points.

Ellen sits in the operating team of a PE growth fund and works closely with scale-up companies. Simone spent 20 years running finance functions, then switched sides to build Finance Collective, a network of CFOs. Every second Thursday we write about what's on finance leaders' desks right now, and talk to people from our networks who have already solved it.

Feedback, suggestions, or something you want us to cover? Write us on [email protected].

CFO Playbook reflects our personal opinions, not those of our employers and is not professional advice.