Day 1: AI for Financial Planning and Analysis

Where AI Fits in FP&A

AI doesn't replace the financial model — it accelerates everything around it. The model still lives in Excel or a BI tool. AI handles the language work: explaining what the numbers mean, drafting the story, summarizing for executives who don't read spreadsheets.

High AI value:
  → Writing variance commentary ("why did Q3 miss?")
  → Drafting management discussion sections
  → Summarizing financial reports for non-finance audiences
  → Generating scenarios and sensitivity narratives
  → Creating board presentation talking points

Medium AI value:
  → Reviewing financial model assumptions
  → Generating questions for budget meetings
  → Drafting financial policy documents

Low AI value:
  → The actual financial calculations (keep in Excel/BI)
  → Data collection and ETL
  → Audit trail and compliance documentation

Variance Commentary: The Killer Use Case

Variance commentary is the narrative explanation of why actuals differed from budget. Every finance team writes it every month. It typically takes 2-4 hours. AI can produce a solid first draft in 2 minutes.

You are a senior financial analyst writing a variance report
for the CFO. Be specific, direct, and use financial language.
Avoid vague phrases like "due to market conditions."

Period: Q3 2025
Department: Sales & Marketing

Variances (Actual vs Budget):
- Revenue: $4.2M actual vs $4.8M budget (-$600K, -12.5%)
- Personnel costs: $1.1M actual vs $0.95M budget (+$150K, +15.8%)
- Marketing spend: $380K actual vs $520K budget (-$140K, -26.9%)
- Travel: $45K actual vs $30K budget (+$15K, +50%)

Context I'm providing:
- Revenue miss driven by two enterprise deals slipping to Q4
- Headcount above plan due to two early hires from Q4 plan
- Marketing underspend due to campaign delays
- Travel increase for two unplanned customer site visits

Write a 3-paragraph variance commentary suitable for a
board-level management report.

The key is providing context alongside the numbers. AI can't know why the deals slipped or why headcount is up — you have to tell it. But once you give it context, it produces sharper, more specific commentary than most analysts write in their first draft.

Build Your FP&A Prompt Library

Create a document titled "FP&A AI Prompts." For each recurring task you have, write a template prompt. Here are the five most universally useful:

1. Budget assumption review: "Review these budget assumptions and identify any that seem aggressive, conservative, or inconsistent with the context I'm providing. [Context] [Assumptions]"

2. Exec summary from financials: "Write a 150-word executive summary of these financials for a non-finance audience. Highlight the three most important things they need to know and one risk they should be aware of. [Financials]"

3. Scenario narrative: "We're running three scenarios for next year: Base, Bull, Bear. Here are the key inputs for each. Write a one-paragraph narrative for each scenario explaining what business conditions would need to be true for it to occur. [Inputs]"

4. Meeting prep questions: "I'm presenting Q3 financials to the executive team tomorrow. Based on these results, generate 10 likely questions they'll ask and suggested answers for each. [Results summary]"

5. Month-end checklist review: "Review this month-end close process and identify any steps that seem redundant, missing, or out of sequence. Suggest improvements. [Process list]"