We’re entering the final days of 2020 with indicators pointing to a much better 2021. Of note is the continued decline in business news about the pandemic’s effects and an increase in content about how this year’s adaptations can help make future years better for companies and FP&A in particular. Remote work is an obvious change, but so are new approaches to talent retention, leadership, compensation, planning, modeling, and M&A. As always, FP&A is critical to how these approaches play out at companies.
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
This past quarter saw a huge increase in annualized GDP, yet many economists still warn that we’re far from fully recovered from the economic effects of the pandemic. In fact, the GDP is still 3.5% below its 2019 ending and we’re only halfway to refilling the 22 million jobs lost earlier in 2020. But, in a positive sign, spending was up across the board. “The third-quarter rebound was fueled by a record 40.7% surge in consumer spending (and) business investment in equipment leaped 70.1%.”
Deloitte / WSJ: M&A Alternatives Take Center Stage: Survey
Mergers and acquisitions all but stopped at the onset of the pandemic, but a new Deloitte survey shows that 61% of companies expect activity to return to pre-pandemic levels before the end of next year. And, while barely one-third of companies are currently pursuing traditional M&A, nearly half are looking at alternatives, such as alliances and joint ventures. What’s more, 87% say they’ve been able to manage deals entirely remotely. “More than half (55%) anticipate that virtual deal-making will be preferred even after the pandemic is over.”
A critical, unspotted error deep within a spreadsheet pushed one CFO to accept responsibility rather than assign blame. Quickly moving beyond finger-pointing pushed the company to completely revamp their modeling and forecasting methods, ultimately eliminating older, static assumptions across their processes. That not only set the tone within FP&A, it reinforced the CFO’s approach to teamwork and team building. “If you have mediocre people, you’re mediocre. If they’re better than you, you can leverage your team.”
Planful CEO, Grant Halloran, says the pandemic brought workforce concerns front and center for companies as health concerns, shutdowns, and cost cutting combined to put HR in an incredibly tough spot. But HR teams who quickly partnered with FP&A to chart a path forward were able to retain top talent while balancing cash flow needs. That not only helped them navigate 2020, it now gives them a better foundation to adapt to whatever uncertainty 2021 brings. “As economic activity ticks up or down in response to factors outside the company’s control, the company is able to pivot quickly to mitigate risks and embrace opportunities.”
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.