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Financial Analyst vs. Finance Business Partner

Financial Analyst vs. Finance Business Partner

I have published several posts related to finance business partnering and while the concept is new to some and old news to others there are those that say.

 “Finance Business Partnering is just FP&A or Business Controlling done well”

What they mean is that there is no reason to invent a “fancy” new position and probably overpay for professionals to do a job which your existing finance staff could already do. If this is the case then I would certainly agree with above statement, however, I would argue that finance business partners are much more than an overpaid financial analyst.

There are distinct differences

To first support my argument I did a similar analysis of the financial analyst role as I did for the finance business partner role in “How Finance Business Partners Improve Company Performance”. To be fair, there are many more financial analyst jobs available in the US market compared to finance business partner jobs. So, I could have easily analyzed 1000s of positions but chose to stop the analysis at 26 positions. Here is a top 5 in terms of responsibilities.

  1. Forecasting or Budgeting
  2. Variance analysis
  3. Performance management
  4. KPI reporting
  5. Process improvements

In total, I identified 36 unique responsibilities and just like when I analyzed the finance business partner jobs there are more responsibilities which were just harder to qualify as unique tasks. It should also be said in the comparison that for financial analysts I didn’t consider financial analysis as a task as that is inherent in the role as well as business partnering is to the finance business partner. So, let’s compare the top 5 of each role.

As a small side note, you can notice that financial analysis is ranked as 5 to the finance business partner whereas business partnering is only ranked 9 for the financial analyst. It is clear of course that there are many overlaps between the positions which there could be many reasons for. Therefore, the analysis is taken one step deeper and below is some of my findings which I, of course, invite you to challenge.

  • Financial analysts are two times as likely to participate in month-end close, systems maintenance or process improvements as finance business partners
  • The word strategy or strategic doesn’t appear on the list of responsibilities for financial analysts
  • Finance business partners are almost four times as likely to perform responsibilities involving the business rather than pure finance tasks

The analysis is supported by several thought finance leaders

As this is only an analysis of 49 positions one should always be careful to draw too many conclusions from the material so let me point to several other factors as well. Previously I have had the pleasure of being part of a presentation given by Managing Director of Europe, David Ketchin from the The Hackett Group, that are some of the leaders within benchmarking of support functions like finance who stated.

“The worst thing you can do if you want to do finance business partnering is send your financial analysts or business controllers home on a Friday and bring them back on Monday handing them a new business card that says “Finance Business Partner”

It was the exact same story Henrik Dahlgaard, partner of Danish consulting company Basico told me when I was discussing the development of finance business partnering with him. Many companies have simply just rebranded their financial analyst or business controllers without changing the content of their jobs.

Analysis vs. business partnering

So, while some financial analyst and business controllers are certainly doing business partnering it is not at the core of their job. In fact, I would argue that there is a very clear distinction between them and finance business partners. Analysts and controllers are concerned with analyzing and understanding the numbers whereas finance business partners are spending most if not all of their time putting the numbers to work for the business. This is best illustrated by the now classic triangle of the finance function which I have also described in further details in “Introducing The Finance Transformation Nine Box”.

The clearer split of the responsibilities between analysts and business partners a company can make the more effective both functions will also work. This is due to the simple fact that being an analyst requires a different skill set compared to a finance business partner. I wrote about the skill set and job description of finance business partners recently in an article published by the Association for Finance Professionals.

I am sure you can find ways of continuing this discussion but if you think that you can just ask your financial analyst or business controller to do some business partnering you will never get it right. It requires different skills and a specific focus i.e. this is not just a task done when all the reporting, reconciliation and systems maintenance is done. This is a core area of finance that needs a specific job role to perform it. However, as always, I would love to hear your thoughts on this?

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