How Controllers Are Approaching 2021 Financial Planning During COVID-19
While there appears to be some light at the end of the tunnel, 2020 proved to be a disaster of epic proportions. Here’s the thing: Thinking about what happened over the last 12 months is easy — predicting what happens over the next 12-18 months — or building out a 2021 financial planning strategy — is an entirely different exercise.
But while the average Joe sat and wondered when a semblance of normality will return, behind the scenes, businesses were tasked with gathering information available to them and synthesize it into the best-informed 2021 financial planning playbook as possible. As expected, this proved tremendously difficult, with the number of variables — COVID-19, an unstable economy, and the election chief among them — causing controllers to approach financial planning in a way they never thought possible.
Recently, Dimensional Research released the results of a study that included over 300 financial controllers, taking an in-depth look at the challenges 2021 financial planning presents and how 2020 as a whole had changed the way they operated as accounting leaders overall. Here are a few takeaways.
Taking “Always Be Prepared” to a Whole New Level
Because of what they do for a living, accountants are generally realists. This is best illustrated in the survey by the 77% of respondents who reported that their teams had included some sort of doomsday scenario for their 2021 financial planning strategy. Depressing, sure, but more than a reasonable exercise given what happened in 2020.
“With controllers so uncertain, planning for multiple scenarios is becoming the norm, and businesses that were already doing it are expanding it,” said Mike Whitmire, CPA*, CEO and co-founder of FloQast. “That means that agile planning will be more broadly adopted — looking at quarter-over-quarter versus year-over-year, for example — and controllers will need to be more hands-on with that process.”
Good leaders always keep an eye out for how best they can help their employees grow as professionals, but given the uncertainty in the world, most survey respondents reported a significant uptick in how they’re interacting with employees on a personal level.
What does that mean? Well, odds are that you’ve experienced something similar during the pandemic.
According to the report, 36% of controllers reported feeling like they were in constant work mode, while an additional 32% reported issues with the new work-from-home environment.
Room for Optimism in the 2021 Financial Planning Strategy
Rest assured: “How COVID-19 Changed Financial Planning and How Controllers Are Tackling 2021,” was not only doom and gloom. As pessimistic as some of these data points probably read, there was plenty of room for cautious optimism.
62% of controllers believed that 2021 business results would surpass 2020 numbers. Additionally, 16% reported that they were “confident” about their business in 2021, while an additional 54% were “hopeful,” for business in 2021.
Not impressed? While the COVID-19 did rank as the most substantial socio-economic event of the last 30 years, 75% of respondents said that their businesses should be able to respond to investment opportunities in 2021. Whether they actually do is yet to be seen, but, hey: It’s still 2020 for another several weeks, and controllers reported significant optimism around the role technology can play in improving existing financial processes and limiting the effects of few resources being available.