More parts of the economy are reopening, giving companies a better view into how their early recovery plans are working. But as news of a second government stimulus program and a reduction in the unemployment rate conflict with regional COVID-19 spikes and warnings of a second wave later this year, the future is anything but certain. So FP&A can expect to continue their frequent what-ifs and revised modeling while the business reacts to changing supplier and customer needs.
Here are a few expert opinions we’ve found helpful in the past few weeks, 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
The Wall Street Journal’s CFO Network Summit asked executives to share how they’re managing the current demands and conflicts of their role. While the CEO of Intel recommended frankness, the chairman of the Financial Accounting Standards Board pointed to the inherent role of FP&A as the buffer between market volatility and the business. But how CFO’s perform now might just define how their own future plays out. “Navigating a crisis can be a make-or-break moment for senior executives.”
One-third of CEO’s think their CFO isn’t up to the challenge of their increasingly significant role as financial chief. The disruption of COVID-19 has created a need for CFO’s who offer more than just financial skills, and who bring creativity, communication, and technology expertise to this expanding role. “What was once the highlight of a CFO’s resume — extensive financial management and accounting experience — is now a minimum requirement.”
A recent PwC survey of finance leaders found that a new wave of COVID-19 infections was their top concern, followed by impacts of a global downturn and general financial impacts. But executives are also looking at how they deal with those concerns with an eye towards the future and seeing things like work flexibility, increased agility, and new technology investments as actually improving their organization in the long run. “It’s clear there’s a hybrid work environment ahead and executives are planning for all options for employees.”
Forbes: RockStar CFOs In Times Of Crisis
What makes a CFO a great executive doesn’t change during a crisis. The traditional core attributes are always necessary, and the last economic disruption in 2008 elevated the role of CFO in both importance and respect. Those who’ve excelled in the role since then should continue to do so even during these tough times. “Strategic thinking, ethical leadership and building your team are all unquestionably more important now than ever.”
Deloitte / The Wall Street Journal: Virtual and Remote: Navigating the Next Financial Close
Most organizations have likely performed their first close and consolidation to be done remotely. But more are surely in everyone’s future. Obviously, technology played a part, be it simple email or advanced predictive analytics. Now is the time to take stock of your virtual close shortcomings and look to build a foundation for your next close. “Lack of investments in virtual technologies have remained chronic hindrances at many companies. The pandemic’s onset only amplified those risks—and created new ones of its own.”
CFO’s continue to cut costs as COVID-19 uncertainty extends into 2021. A recent survey found that, even with the massive cuts in budgets through May, additional cuts are already planned. Full-year 2020 reductions range from an average estimate of 25% for Marketing to near 10% for even the least-impacted teams. But, some FP&A teams are already looking to boost budgets in preparation for a brighter 2021. “Expanding IT and sales budgets, however, means that CFOs are investing for the next phase of growth.”
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 reopenings and recoveries. If you have comments, questions, or suggestions, please do what?