More CFO’s are talking about how they’re approaching recovery as widespread reopening of the economy looms large. Most expect there to be serious and significant business pain in the short-term, obviously, but silver linings are starting to appear. The benefits from moving at least some workers to remote offices is becoming more apparent, as is using limited resources to double-down on strategic initiatives. But, it’s also becoming much more clear that the only hedge against continued uncertainty is in continuously planning for multiple scenarios.
Here are a few expert opinions we’ve found helpful in the past week, and we hope you do, too. We’d love to hear from you, so please join our FP&A Slack Community and share your thoughts and suggestions. It is publicly available to everyone to discuss ideas related to the current crisis as seen from the FP&A perspective.
What the Experts are Saying on FP&A
McKinsey offers eight key actions executives can take after COVID-19 to ensure a better chance of a successful relaunch. “Their eagerness to restart and rebuild is understandably large, but so are the questions that a return to business raises. What is the financial health—and state of mind—of suppliers and consumers? How can employees be motivated to return to work and reassured about their safety? How quickly will demand return?”
Everyone is looking to cut costs, but smart CFO’s are looking far into the future to use this opportunity to support key strategies, make long overdue cuts, and reshape competitive standing over the long-term. “The most successful CFOs, Gartner said, will appreciate the few initiatives that drive outsized advantage. They not only protect these select projects from cost reductions, but scale up the areas supporting these bets.”
Many businesses are allowing employees to work remotely even after stay-at-home restrictions are lifted, or are keeping offices closed as far as through the end of 2020. But turning temporarily remote workers into permanent ones comes with both costs and benefits. “The findings, based on a poll of 166 CFOs, ties into a spate of executives saying that work may stay remote since companies can cut real estate costs and maintain productivity.”
Of surveyed finance professionals, 85% predict earnings to be significantly below plan, according to a new study from the Association for Financial Professionals. But finance must prepare for multiple eventualities, since no one yet knows how this will play out. “Creating financial and operating models is critical to creating alignment across the enterprise, and FP&A professionals are making numerous scenarios to understand actions, impacts and options.”
The crisis is positioning FP&A as the key resource for information and analysis as business units look to regroup and recover. That’s requiring finance professionals to expand their skillsets while organizational alignment and overall business strategy take precedent. “‘If the CEO is becoming more externally facing, CFOs need to elevate and become an enterprise leader. If the CEO is a functional leader, CFOs need to be a strategic leader…,’ recommends Korn Ferry Financial Officers Practice North American Leader Barry Toren.”CFO: What COVID-19 Has Revealed About Working Remotely
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