Being Planful: Helpful FP&A Resources to Navigate an Uncertain World

Being Planful: Helpful FP&A Resources to Navigate an Uncertain World

CFOs have become the strategic navigators for most businesses as they chart a financial course through some of the roughest economic seas in a generation. Or two! More are starting to see a parting in the clouds of uncertainty and chaos, with recent surveys highlighting the obvious areas of concern while pointing to increased optimism as we start to look towards 2021. What’s most promising is that most CFOs have put their companies in a position to “thrive” as the planning season gets underway. 

Here are a few expert opinions we’ve found helpful in the past week, and we hope you do, too.

What the Experts are Saying on FP&A

CFO: Recovery Through Resilience: Considerations of Top CFOs

A Deloitte survey finds that most CFOs expect a slow recovery and remain focused on cash and liquidity. But they still see brighter skies ahead, with 37% saying their companies are already in “thrive mode.” This optimism could position more companies for the rebound most CFOs expect to happen in mid 2021. “One obvious example of how CFOs are taking a resilient approach to navigate uncertainties is the widespread adoption of virtual work.”

CFO Dive: Amid remote work, CFOs expected to impart digital change

More than half of CFOs say they’re responsible for digital transformation in their organization, but nearly the same amount admit they’re falling short. A main suspect is not the capabilities of the technology, but more the organization’s ability to change. “’CFOs themselves acknowledge and accept that, as the owner or sponsor of digital transformation, they need to also own the people side of things.’”

Forbes: 4 Questions CFOs Must Answer As They Plan For The Future

CFOs are facing tough financial headwinds and much uncertainty, yet they most still hold optimistic views of the near future. Navigating that future, however, will require tough questions about staffing levels, real estate needs, improved scenario planning, and accelerated investments in digital transformation. “CFOs should look for more opportunities to automate and digitize back-office functions to improve efficiency, increase agility, and improve or accelerate processes.”

Deloitte / WSJ: From On-site to Virtual in Two Days: A CFO’s Experience

The pandemic-driven shift to at-home work was abrupt, but many companies were well prepared because they had already begun transforming Finance. Having a good foundation in team communications and easy-to-use tools was helpful to this CFO, whose team released their financial statements even as the lockdown was just underway. But, more importantly, the team avoided postponement of their financial statements with the help of their modern FP&A solutions. “‘The relative smoothness of the process was made possible by three key factors, the first being technology.”

CFO Dive: CFOs must grapple with pandemic-related payroll tax nexus

At-home employees could open up a state-by-state can of worms when it comes to payroll taxes. Employees may have changed work locations due to the pandemic, which could result in incorrect or missed state tax filings by businesses. The confusion will require FP&A teams to better track employee location across the year. “The good news is that a growing number of states responded that employees who are telecommuting due to the pandemic will not create nexus for corporate income tax or sales tax, at least for a specified period.”

Stay Tuned for More Useful FP&A Content

We’ll be continuing this weekly update with links related to how FP&A and CFO’s are leading their organizations through the continuing recovery. If you have comments, questions, or suggestions, please engage with us on Twitter, LinkedIn, and Facebook.

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Being Planful: Helpful FP&A Resources to Navigate an Uncertain World

Being Planful: Helpful FP&A Resources to Navigate an Uncertain World

Remote, home-based work continues for most of us, so the topic of employee wellness is coming to the forefront. It’s falling to the CFO and FP&A to find ways to incorporate employee wellness efforts into the overall organization’s budget. Digital transformation and technology tools can help ease the work stress, but it also requires a personal approach to realize the positive business benefits of healthier, happier employees. CFOs are also looking to promote their own well-being, from accepting a new role to expanding their skillset in the face of a changing economic reality.

Here are a few expert opinions we’ve found helpful in the past week, and we hope you do, too.

What the Experts are Saying on FP&A

Deloitte / WSJ: How CFOs Can Bridge Value Creation and Employee Well-being

The challenges caused by remote work have put employee health and well-being in the spotlight. CFOs should be championing these efforts, since improving worker well-being can actually generate positive ROI. Quantifying that ROI, however, can be tricky since the benefits are spread over a long period of time. “As with any asset, companies should invest in employees to optimize their future value and then measure the effectiveness of that investment—for instance, by determining the ROI from workplace mental health programs and the financial impact of improved talent attrition rates.”

CFO Dive: Amid remote work, CFOs expected to impart digital change

More than half of CFOs say they’re responsible for digital transformation in their organization, but nearly the same amount admit they’re falling short. A main suspect is not the capabilities of the technology, but more the organization’s ability to change. “’CFOs themselves acknowledge and accept that, as the owner or sponsor of digital transformation, they need to also own the people side of things.’”

CFO / PwC: 4 Lessons for Working Remotely in Your Finance Function

The topic of remote work usually includes a conversation about those who wish to remain working from home even after the pandemic subsides. Relying on chat and video calls to bridge the gap between office and home workers can be difficult. People on both sides will need new skills, new approaches to work, and more effective communication. FP&A specifically should revisit internal controls and look at reworking finance processes to better facilitate a virtual close. “Setting up for short-term virtual work is one thing; having a virtual work operation that allows you to consistently deliver quality experiences for clients and employees is another.”

Fast Company: Adjusting your employees to long-term remote work

Putting people first is a recurring mantra these days. Easy ways to reduce the uncertainty and stress that employees are feeling include to over communicate and listen more often. But, especially for CFOs and Finance managers, it’s critical to show genuine concern for their own wellness as well as the wellness of their teams. “When people can take time for themselves, they can give more of themselves to their work. Leading by example is the best way to encourage this and to set a precedent for your teammates.”

Business Chief: The Tech Savvy CFO: Driving Impact in the COVID-Era

The pandemic has accelerated the digital transformation of many organizations. This has put the CFO and CIO in constant collaboration, but has put some less tech savvy CFOs at a disadvantage. It’s critical for the finance chief to take time to understand the technology behind the investment, and be willing to view less successful tech investments as learning experiences rather than failures. That mindset should extend to their own digital transformation of Finance, too. “Placing a higher premium on technological skills can be a true differentiator for the finance function, and the business at large.”

Stay Tuned for More Useful FP&A Content

We’ll be continuing this weekly update with links related to how FP&A and CFO’s are leading their organizations through the continuing recovery. If you have comments, questions, or suggestions, please engage with us on Twitter, LinkedIn, and Facebook.

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Here’s How the Finance Department Can Help Marketing Make More Money for the Business

Here’s How the Finance Department Can Help Marketing Make More Money for the Business

As a marketing leader, you’re expected to have a really good sense of your own department. Luckily, there’s more technology than ever to track your team’s performance, your insights, and your data. But marketing leaders shouldn’t take a myopic, marketing-only view of that data. Instead, it’s increasingly important to build a better relationship with Finance so that every marketing move contributes to the overall financial goals of the company. 

I’ve been a marketing leader in both high-growth startups and multi-billion dollar organizations, and I’ve seen firsthand the explosion of marketing software over the past fifteen years. With an ocean of information available, it’s easy to get lost in the shuffle with marketing objectives and key results. But there’s one critical question that Marketing always needs to answer: How much sales pipeline are we creating for every dollar we spend?

The answer to that question lies in a department that historically might have been typecast as the polar opposite of Marketing. In this day and age, in fact, it’s the Finance department that can make Marketing’s life easier, clearer, and more productive.  

Going Beyond the Budget 

At the basic level, Marketing’s conversations with Finance are centered around calibrating spending. Marketing typically interacts with Finance when they need to know how much they’re able to invest in a particular campaign, or figure out whether they need to hire someone in-house, outsource to a contractor/freelancer, or use an agency/outside vendor. Simple budgeting questions.

But beyond these “table stakes” conversations, Finance can help Marketing operate more holistically because Finance plans for every part of the business. That complete financial picture of the company can help Marketing understand the cost of acquiring customers, the lifetime customer value, and how much money is really coming in from different marketing and sales activities. When I talk with Finance, I get deep in the sales funnel, I learn about hiring plans, I really get a sense of how interconnected all of the company’s initiatives are.

Here’s a perfect example: say the company is looking to hire a sales rep in a new territory. Not only would I know to start investing marketing dollars and effort in that region before the rep is hired, but Finance can show me data such as pipeline per rep for that territory. Then I know exactly how to deploy resources to that territory given the expected pipeline return. By the time that sales rep joins, there’s a marketing campaign already in place to help bring them qualified leads. With a robust pipeline, that new rep’s time-to-yield is much faster, putting everyone from the salesperson to the marketing department to the business as a whole in a position to succeed. 

Increasing Marketing’s Financial IQ 

After considering the example above, how would you rate the financial IQ of your marketing team? If you’re unfamiliar, financial IQ is your organization’s ability to leverage accurate, relevant data to make financially smart decisions. You could be the world’s greatest marketer, but if your decisions aren’t contributing to the company’s overall financial health, that’s bad. A higher financial IQ helps you make the best decisions based on the company’s financial goals. 

When Marketing elevates its financial IQ, the first order effect is seen in how the marketing budget is managed. The cycle times between marketing, sales and finances become heavily compressed and allow for agile deployment of resources, along with deeper exploration of performance through audience segmentation, for example customers in the healthcare industry result in higher profitability versus those in the manufacturing industry. Knowing that simple fact might push you to move budget so that you’re running more Healthcare programs, or programs that may cost more but that have higher ROI. 

That’s an obvious example, but the second order effect comes when Marketing widens its lens across the organization, taking into account ripple effects as the business moves in harmony. For example, knowing that a collection of customers that have smaller IT organizations requires more hands-on customer support than a larger customer could affect how you craft your marketing message and where you choose to target potential opportunities.

We owe a big part of our financial IQ to having a Continuous Planning platform. Instead of relying on slow, disconnected spreadsheets, we have the information we need to give us clear visibility into how our decisions impact financial health across the company.  Seeing the details in context, such as hiring plans and sales funnels, helps us make those decisions based on more than just leads generated or funnel filled. It gives us that “bigger picture” view that everyone strives to attain.

With Continuous Planning, instead of having to wait to get this information from Finance, Marketing is always armed with that knowledge and with those cross-organizational questions already thought out. Finance, in turn, prepares strategic insights to help advise Marketing, and both sides leave meetings feeling like we’re all making smarter plans and better decisions. 
Continuous Planning does require the right tools and processes. But once you’re working with Finance, you can really unlock Marketing’s potential.The result is more impact, both out in the market and here in the business.  Hear Planful customers share how they achieve tighter alignment across the company, and connect all corners of the business, with Continuous Planning.

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Six Ways That Planful Uses Company Values to Guide Strategic Growth

Six Ways That Planful Uses Company Values to Guide Strategic Growth

I started at Planful just over a year ago as SVP of People & Culture (that’s “human resources” rebranding ourselves). Our culture was going through an evolution, with new leadership, a new vision, and new energy being injected into the company. We made it clear we would take a people-first approach, and that our values were to be a tangible and visible component of our company DNA. My job was to make that happen.

I’ve been in operational and people-focused roles for over a decade and across various countries. I’ve seen the mistakes leaders make in simply treating people as a generic resource and values as a buzzword. But the workplace has changed dramatically over the past decade, and it’s really changed over the past 6 months. It’s now crystal clear that’s not how a company culture is built and solidified. Values should anchor a company’s every decision, no matter if times are good or bad.

Here are six ways Planful uses our company values to guide nearly everything we do. 

#1. Our values define us.

We started by building a set of values to define our culture and our company. They would inform our strategy, guide our decisions, and be used to set the expectations across our ecosystem, from employees and customers to partners and executives. Our values are also a constant topic of conversation because we proactively reinforce them with our teams at every chance we get. Most of all, they are real, they are a part of the Planful culture, and we continue to embed our values across the organization.

Here’s our list of company values, which you can find on our careers page: 

  • Customers: We put our customers first and strive to always do what is right for them.
  • Teams: We put our team ahead of ourselves, being humble, supportive and collaborative.
  • Ownership: We take personal ownership for getting the job done every time, while acknowledging and getting better from our mistakes.
  • Excellence: We strive for the highest levels of performance and do not compromise.
  • Progress: We have a bias for action, create momentum, and value continuous progress over perfection.

#2. We consistently reinforce our values.

These values are part of who we are and they acknowledge that we are people, first and foremost. Our People & Culture team reinforces these values with quarterly Planful Value Awards, shoutouts to exemplary people during all-hands meetings, and a constant stream of recognition over our dedicated Slack channels. 

These and other initiatives show our teams that we’re honest and authentic when we tout our values. But it also helps our employees understand why we’re making certain decisions and helps us create a work environment that feels cohesive and aligned.

#3. Employees use our values to guide their career.

Everyone has different motivations for choosing to join and stay with a company. We want to be transparent on what we expect and how we work so that potential employees can make an informed decision. 

For example, our values show that we expect ownership of roles and tasks, and strive for progress over perfection. We also value humility and collaboration. People who thrive on responsibility and have high expectations of others and themselves will do well at Planful. 

#4. We put our people first.

Our values guide us in making Planful a place where, again, people come first. One example is mental and physical health. Our CEO, Grant Halloran, is particularly vocal about us taking care of ourselves. He makes personal calls and engages with individuals over Slack. He also supports our people initiatives, including a new program that gives our employees access to licensed therapists. 

Grant, and all of our leadership team, treat our values and these initiatives as pillars that support each and every one of us. We even point to being supportive and collaborative in our “teams” value, and that extends to the whole person, not just the coworker in them. Our organizational empathy and compassion have been particularly inspiring as we’ve all been under intense personal and professional stress lately.

#5. We rely on our values in good times and bad. 

We truly believe our reliance on these values enabled us to quickly and easily transition into a total work-from-home company as the COVID-19 pandemic took hold. We adapted faster than expected, and we’ve seen that making people comfortable in their roles, resilient in their wellbeing, and connected to their peers and managers absolutely helped.

We doubled-down on our values during this unprecedented time instead of just discounting them during the chaos. Looking back, it put us in a better position to react with agility and flexibility while still getting our jobs done and continuing to delight customers. 

#6. Our values apply globally.

We are a diverse (and dispersed!) team. Our executives alone hail from Australia, India, South Africa, Italy and the U.S., and we have employees in the U.S., Canada, Hyderabad, India, and the U.K. This diversity is a distinct advantage, and we consciously crafted our values to apply universally across our global workforce.

With such a widespread team, we are a collection of many different backgrounds and cultures. We’re even experiencing regional differences based on how our communities are adjusting and responding to the pandemic-related disruptions. But, using our values as the guide, and applying them globally, we’ve been able to work quickly and with a people-first mentality. And, as we start to think about returning to work, those same values will guide that adjustment, too.

Our values make us better.

Ultimately, Planful has built these values, and continues to reinforce them, because we want to take a proactive approach to building a great team and reaching our goals. Of course, there will always be the occasional hiccup and opportunities to grow and improve, but our values will serve as a guide for everyone, no matter what tomorrow brings. 

If this sounds like an attractive work environment to you, check out our current openings. We’re always looking for top talent to help us build the best Continuous Planning platform. And, if you’re curious what it’s like to work here, you now know what guides us. 

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Helpful FP&A Resources to Navigate an Uncertain World

Helpful FP&A Resources to Navigate an Uncertain World

The upcoming planning season will likely be stressful due to continued uncertainty. Cash preservation is still the recommended priority, but so is a complete rethinking of the financial planning and forecasting process. Playbooks that worked in past years will likely be obsolete this year. Since no one can accurately predict the future, flexibility and agility continue to be valuable assets for any FP&A team. But, on the bright side, companies have stockpiled so much cash that many are looking to put it to work.

Here are a few expert opinions we’ve found helpful in the past week, and we hope you do, too.

What the Experts are Saying on FP&A

Forbes: What CFOs Are Prioritizing For 2021: Liquidity, ESG, And Right-Sizing For The Future

“Cash, sustainability and clairvoyance” are the CFO priorities these days, especially as 2021 planning begins. Cash will always be king, of course, but the post-pandemic reality is essentially unknown. The lack of digital transformation also exacerbated the pain of transitioning to remote work for many companies. Both of those should be top CFO priorities. “Changing tomorrow starts now – and should have started yesterday.”

Ernst & Young: How to improve your forecasting in a constantly changing world

Many companies will need to rethink their entire approach to forecasting in light of COVID-19. Those starting with existing models could put their entire recovery at risk. Taking a hard look at new customer behaviors is critical, and data inputs should be scrutinized to avoid reliance on old data or assuming current data is indicative of future trends. “(F)orecasting must become a core competency, with an emphasis on analysing data from multiple and sometimes novel sources, to understand not only your customers’ plans, but also the potential change in who your customers are and how you deliver value to them.”

CFO: Metric of the Month: Uncollectable Balances as a Percentage of Revenue

Bad debt is a fact of life this year. But how much is too much, and does that change during a pandemic? It is likely bad debt has increased for most companies, so it’s important to continue tracking this metric as the pandemic wears on. “(K)eeping a high-value customer might make it worth accepting slower or lower payment as you and your customer work through the economic hardships of the COVID-19 crisis.”

CFO Dive: Sequoia Capital exec: CFOs must be master storytellers

CFOs must focus on the story behind the numbers to weave a tale that makes clear the ultimate conclusion as well as the path to get there. Simply talking about the numbers does little to build enthusiasm or change behavior. “Any finance professional who rises to the level of CFO has mastered the technical parts of the job. The differentiator is their ability to move the organization in one direction or another.”

WSJ: After Stockpiling Cash, Some Companies Are Looking to Spend

Cash holdings by U.S. companies have increased by roughly 25% since the end of 2019 and CFOs are eager to spend it. Some are looking to invest back in their business, but, with so many companies in financial trouble, M&A activity is likely to heat up. “The coronavirus pandemic has created a divide between corporate haves and have-nots, with some companies building on existing stockpiles of cash and enjoying access to cheap debt, while others are struggling to survive.”

Stay Tuned for More Useful FP&A Content

We’ll be continuing this weekly update with links related to how FP&A and CFO’s are leading their organizations through the continuing recovery. If you have comments, questions, or suggestions, please engage with us on Twitter, LinkedIn, and Facebook.

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How the Pandemic has Changed Everything—and Nothing—for the Office of Finance

How the Pandemic has Changed Everything—and Nothing—for the Office of Finance

If you would have asked me six months ago what the biggest challenge facing finance is, the answer would have been easy: disruption. Market volatility, changing regulations, evolving business models, emerging competitors — you name it, finance has to deal with it. 

Then along came COVID-19, and to say it took the meaning of disruption to another level would be an understatement. If finance found it challenging to inject speed and agility into the planning process before the onset of a global pandemic, well, the conditions afterward made it nearly impossible to do so.

Today disruption remains a worthy opponent for finance. And if you asked me six months ago how finance could manage the waves of volatility, my answer would have been the same then as it is today. It begins and ends with adequate planning. 

Everything is nothing and nothing is everything 

It’s almost hard to remember what life was like for finance before the pandemic. Since COVID, we know that business operations have been challenging for finance leaders, to say the least. In fact, according to the recent Gartner report, “How to Get the Most Out of Your Cloud FP&A Implementation in Times of Crisis and Opportunity”:

COVID-19 has disrupted most organizations, negatively affecting business performance and making existing plans unachievable. Organizations must replan and reforecast while increasing forecast frequency in order to produce a new financial plan that matches the new business environment.”

Let’s pause for a second at the phrase “making existing plans unachievable.” In many ways, the current conditions feel like finance teams have been given a brand-new hoop to jump through. This is largely true: we’re facing challenges we’ve never had to worry about before and coming up with solutions to problems we never thought imaginable. 

But then we get to “Organizations must replan and reforecast while increasing forecast frequency,” and it becomes clear that what we’re dealing with today isn’t inherently new for the office of finance. Re-planning, re-forecasting, continuous planning: these are all activities that have become the norm and are set to grow in adoption over the coming years. 

So if we knew then, and we know now, that re-planning and re-forecasting are essential activities to help manage disruption, what continues to hold the office of finance back from achieving greater agility? Why are finance organizations still struggling to pivot quickly and adapt nimbly to changes? 

I believe the answer comes down to two things: the toolset and the action.

First, let’s start with the toolset

One of the reasons why finance teams struggle is because they lack the right toolset. On-premise solutions are inflexible, slow, and fragmented. Spreadsheets can’t handle the complexities of large data sets and changing business conditions. Neither option is flexible or collaborative enough to meet the needs of today’s dynamic business environment.

Put another way: think about this as it relates to the game of golf. You wouldn’t show up to 18 holes of golf with just a nine-iron. You would bring your entire golf club set so you can adjust which club—which tool, if you will—is best for each shot. Par 5? Pull out your driver. On the green? Grab your putter.

The same kind of concept applies to your planning toolset. Finance teams need a flexible, collaborative cloud-based planning solution that gives them the individual tools they need to adapt and adjust to different business conditions. 

For example, the Planful platform offers finance teams purpose-built solutions—such as structured and dynamic planning, reporting, and consolidation—that are specifically designed to meet the distinct requirements of FP&A planning. Having all of these tools within a single platform accelerates planning cycles and provides insightful financial reporting to make confident business decisions. 

In the report, “2020 Strategic Roadmap for Cloud Financial Planning and Analysis Solutions,” analysts Robert Anderson and Jon Van Decker share: 

Solutions blending core financial management and FP&A will soon provide new levels of agility and transformational value. Enterprises seeking a unified platform strategy will be increasingly attracted to these solutions.”

Now, let’s talk about the action

The toolset is the first part of the equation; the second part is how finance teams put it to use. 

Let’s go back to the game of golf for a second. We know that having the right set of clubs is a start, but it’s the strategy behind your swing that ultimately gets the ball into the hole. 

There are several components to this. First, you have to evaluate your surroundings and consider any hazards: wind, distance, water, sand, and so forth. In the meantime, you have to block out all of the noise around you. Each shot is different from the last and you have to continuously plan your next move.

Your planning process is no different, and your toolset is only as good as it’s being used. You can have the best cloud-based financial planning platform, but you can’t get to where you want to go without having the right planning process in place. This is where a Continuous Planning process comes in. 

Continuous Planning gives finance leaders an agile and responsive way to operate, plan, and perform. It’s a vision for finance and business leadership to drive a more continuous, agile planning, and decision-making culture. It increases the financial IQ of an organization and, in turn, increases the speed, agility, confidence, and frequency of finance-led decision-making.

Putting the two pieces together

When companies can combine these two pieces—the toolset and the action—successfully, they should be able to get time-to-value quickly. But for some companies, time-to-value is just another part of the struggle. In the “How to Get the Most Out of Your Cloud FP&A Implementation in Times of Crisis and Opportunity” report, Gartner found that:

While many organizations have implemented new cloud financial planning and analysis (FP&A) tools, many have not completed all of the phases of their planned implementation. They are struggling to assemble all operational and financial details that are necessary inputs into the planning process.”

At Planful, we understand this struggle all too well — it’s a challenge many of us have regularly faced throughout our own FP&A careers. We understand that most companies simply can’t afford to wait for a drawn-out, months-long implementation project. They need time-to-value quickly.

This is what makes Planful Now so critical for finance teams who are looking for better ways to manage today’s unpredictable business conditions. It can shorten FP&A cycle times, open collaboration channels across the business, and enable the agility businesses need to respond to unpredictable market shocks. The best part? It can be rolled out in under 30 days. 

How can your FP&A platform empower confident and agile financial decision-making? Join us for our weekly interactive Continuous Planning demo! Learn more about the Planful platform and its solutions here

Gartner, How to Get the Most Out of Your Cloud FP&A Implementation in Times of Crisis and Opportunity, John Van Decker and Robert Anderson, 5/28/2020
Gartner, 2020 Strategic Roadmap for Cloud Financial Planning and Analysis Solutions, , John Van Decker and Robert Anderson, 2/21/2020

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How the Pandemic Changed the Cash Flow Playbook

How the Pandemic Changed the Cash Flow Playbook

Planful is full of FP&A professionals, from our product and sales teams to our services and implementation teams, and, of course, our finance team. Planful was built this way so we’re always talking to our customers in the language of finance. We’ve been in your same roles, and many of us know, first hand, the challenges you face everyday. 

I’m a good example of that approach. I was educated in accounting and finance and spent the first 5 years of my career as an auditor and FP&A professional with Ernst & Young. So I don’t just know the theory behind FP&A, I know the practice, too. 

But over the past several months, the challenges faced by FP&A have been flipped on their heads by the COVID-19 pandemic. No matter how much real-world experience anyone had before 2020, this is a totally new ballgame. To better understand the current demands on FP&A, I talk with our customers nearly every day. What I’m hearing is that the playbooks you’ve used for the past decade or more are out the window. Finance is now faced with creating a new playbook, on the fly, while reacting to the chaos and constant uncertainty caused by the pandemic.

As the old analogy goes, it’s like trying to build the airplane as you’re flying it

But in the midst of this uncertainty and chaos, I’m finding that FP&A has been pushed into a more strategic and visible role, especially where cash flow is concerned. And that’s exciting! It’s a privilege and an opportunity. The business is relying on you to answer the tough, important questions required for not just liquidity and visibility, but in many cases, pure survival. You’re also being asked these questions more often and expected to produce answers much faster. And, since the resulting decisions have taken on a new urgency, and can have dramatic effects on future cash flow, the precision of those answers is critical. 

Let me drill down on those three areas down a bit more. 

Importance: Cash has always been king, but during crisis, visibility into, and control over, cash takes on an entirely new level of importance. The pandemic was an unexpected shock that’s impacting businesses and internal units differently, just as it’s changing how external customers and suppliers need to operate. That changes how you’re getting paid, who you’re paying, and how fast that cash is changing hands. Where cash flow used to be an almost secondary concern in terms of planning and forecasting, it’s now taken center stage.

Speed/frequency: Not so long ago, cash flow forecasting and reporting was a structured, periodic task that was just another part of the financial reporting package. It was typically performed on a quarterly cadence from a financial reporting standpoint. Oh how things have changed. You’ve been telling us throughout the pandemic that your C-suite and boards are demanding cash flow updates daily, or even multiple times per day. That’s a huge change, and if your cash flow forecasting and reporting process is manual, it’s a heavy anchor on FP&A’s ability to do anything else.

Like other companies with a retail presence, Bose Corporation was hit hard by the pandemic. Ongoing and localized fluctuations in business reopenings and shut-downs makes cash flow forecasting a nearly continuous task. But, as they explained during our Planful Now Virtual Tour, they’re using Planful to make fast adjustments and keep their plans current. 

“Being able to reforecast quickly and efficiently in the next 12 months is going to be hugely helpful for us as we pivot and redirect the ship with COVID-19,” said Luiz Martinez Luna, Senior Analyst, Corporate FP&A at Bose Corporation. 

Accuracy: It’s not an exaggeration to say that some of your decisions over the past few months have been critical to your company’s survival. That makes the need for accurate cash flow forecasts even more important. We’re hearing more of you moving to the direct method over indirect, which helps you move faster while gaining more tactical and operational accuracy. Some have even been forecasting cash flows down to the contract level, showing the granular precision required to get a complete and accurate picture of incoming and outgoing cash flows down to the dollar. It’s a reflection of the day-to-day reality of business during a pandemic, and it’s hard. 

You’re being pushed to be better in all three areas. For Planful customers, they’re getting through this crisis with the visibility, speed, and accuracy they need to make better decisions. They’re better positioned to quickly inform executives and the board, give the business a higher financial IQ so they make better decisions, and do it all with more accuracy so those resulting decisions are more effective. 

“We are using Planful to do what-if scenario analysis for the BOD meeting,” says Scot Kroenung, Director of Finance and Accounting at UniGroup. “That helps us see what we can realistically predict what the business is going to look like over the next 60 days, assess the impact on earnings and cash. We need to turn this around quickly to be useful, and Planful makes that easy.”

Planful offers the full lifecycle of Continuous Planning solutions, but cash flow forecasting, modeling, and what-if planning are of utmost importance as we all look to rebound from the pandemic. Planful lets you quickly forecast cash flows, using direct or indirect methods, to ensure business continuity and smart allocation of capital. With Planful Now, you can be using Planful in under 30 days.

Watch this on-demand webinar to get a better understanding of how Planful can help. Our product team dives into the Planful solution to show you exactly how cash flow forecasting works, how easily you can tweak assumptions to create on-the-fly what-ifs, and how you can drill down into unit sales or specific customer receivables, for example, to quickly plot out new scenarios.

Planful is built on FP&A experience, so when our customers share with us their stresses, fears, and challenges, we instantly look for ways to help. We know what it’s like to be in your shoes because we’ve been there. You’re telling us that better, faster, more flexible cash flow forecasting is an urgent need. Let us help you get it. 

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Being Planful: Helpful FP&A Resources to Navigate an Uncertain World

Being Planful: Helpful FP&A Resources to Navigate an Uncertain World

As summer draws to a close, FP&A is settling in with a more pragmatic view of the road ahead. The challenges faced due to the pandemic are now less chaos and disruption and more known uncertainty and a new normal. Teams are frequently finding themselves raised to a much more strategic role, especially if they have the right tools and focus to guide the business to continued short-term success. And, with the economic outlook still quite murky, those who can successfully navigate this transition could become a hot commodity in the near future.

Here are a few expert opinions we’ve found helpful in the past week, and we hope you do, too.

What the Experts are Saying on FP&A

WSJ: CFOs Gain Valuable Skills in Bankruptcy’s School of Hard Knocks

The pandemic is forcing more companies into bankruptcy, but surviving that process can be viewed as a learning experience for FP&A and the CFO. Of course, CFOs need to have done their best to avoid bankruptcy, but given the current environment, it’s been an unavoidable fate for many companies, especially those in retail and travel. And, for better or worse, it adds to a CFO’s skillset and demonstrates their ability to juggle the process while managing ongoing FP&A activities. “Among their marketable new skills: the ability to produce high-stakes liquidity forecasts, negotiate with lenders and even revamp a company’s whole business model, all while navigating legal proceedings and managing everyday responsibilities such as closing the books.”

CFO Dive: CFOs challenged to retain finance talent amid COVID-19

On the same topic as above, companies struggling to adapt to a post-pandemic normal are actively recruiting FP&A professionals, while those at unstable companies may already be looking to make a move before they’re downsized. That puts pressure on CFOs to actively retain their most valuable team members. Those who are adept with digital tools, show curiosity, and are comfortable with their remote work environment are bubbling to the top of that retention list. “‘They must be willing to be innovative, help drive the right kinds of decisions, and are not just doing one thing for our company, but are part of a larger team making our company better.’”

Deloitte / WSJ: Laying the Groundwork for a Future-Ready Planning Process

There is hope that this black swan event is pushing FP&A to better prepare for continued uncertainty and potential future events. Experts suggest companies employ more  “shock resistant” planning techniques, such as continuous planning, a focus on value-add activity, and incorporating more digital capabilities. “CFOs also need to challenge the existing mechanisms by which they are integrating, analyzing, and modeling vast quantities of data. Using enhanced capabilities, they may be able to unlock the value uniquely attributable to financial forecasting—its ability to inform strategic decision-making—and, hopefully, avoid the kind of shell shock they’ve experienced in the past year.”

Financial Management: The pandemic’s effects on forecasting and budget allocation

Results from a survey earlier this summer indicate that FP&A teams have significantly accelerated their financial modeling frequency. That’s to be expected given so much uncertainty and change, but the results are quite jarring: 43% of companies are modeling weekly or more often. The remainder model at least monthly or as needed. And while most used to forecast on three- to five-year horizons, the norm is now a year or less. “The majority of the respondents now forecast for the next 12 months, with forecasting for the next six months and for the next three months being the next most common.”

CFO: Moving Beyond Quick Fixes to Sustainable Value Creation

“The new normal” is an overused, yet accurate, term. Most FP&A teams have adapted to the current reality and stabilized cash flow, increased liquidity, and equipped the business with the financial IQ they need to, at the very least, survive for the short-term. But now that those temporary fixes have taken hold, where should CFOs look to instill longer-term stability? “Companies now face the task of balancing competing goals: improving cash flow and implementing sustainable value creation strategies, while simultaneously ramping up for increased business activity.”

CFO Dive: FP&A and accounting must speak the same language

It can be a challenge to get every corner of the business speaking the language of finance. But when even FP&A and Accounting are siloed, it can cause inconsistencies and derail both sides of the conversation. Communication and collaboration are critical, and the  best solution might be to keep these two teams focused on the business. “Another way to keep teams working together is to train them to look at numbers in terms of business drivers. FP&A specialists tend to be better-equipped to do this, because translating business activity into financial terms is their job. But accounting staff can benefit from it as well.”

Stay Tuned for More Useful FP&A Content

We’ll be continuing this weekly update with links related to how FP&A and CFO’s are leading their organizations through the continuing recovery. If you have comments, questions, or suggestions, please engage with us on Twitter, LinkedIn, and Facebook.

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