What We Learned in 2020

December is a time for reflection, and so the AFP FP&A Advisory Council closed the year out with a round table discussion on what has changed. Not necessarily what has changed, but what have we learned? The edited discussion follows:

Jeff:     I have learned that we need to be face-to-face a whole less amount of time than our leadership assumed we would need in order to be productive. I'm pretty amazed at how much extra work the teams have picked up considering we're not face-to-face; we were able to get through three quarter-end closes and a major ERM transformation, turning off some systems and turning on others, without missing a beat.

Mike:   I agree. I work for a global company, we always perceived ourselves to be global, but there was a senior level bias of having meetings face-to-face and I think that's going away.

Another benefit that we've seen through COVID is basically people are creating less paper, which is good. I always thought I was green friendly and now I produce even less more now.

Pete:   Just the resilience of everybody. A lot of curve balls got thrown and people were able to adapt pretty quick. I know there's a lot of people in the country that are still struggling from the standpoint of lost jobs, lost interaction, but still there's a resiliency of people.

From a finance perspective, the thing that strikes me is it reinforced that the budget is nothing more than a plan. I don't think anybody could have predicted this type of financial impact to all the industries. But the budget is just a plan and it really is not the main driver of your business. The main driver is serving your customers, taking care of patients or whatever else other business you're in.

Mitch: I have a question. We just talked about the fact that budgeting was less critical. But we're in the middle of budget season right now, how many companies having gone through this and thrown away their budget last year and recognize that they need to do rolling forecast are still doing the same budgeting thing now all over again?

Geetanjali: For us [at a young company with high staff turnover this year,] creating a budget this year became extremely important to start the conversation about where we are, and where we are going. I have a new appreciation for budgets because without it, it was very difficult for us to keep people accountable for their work.

Separately, I learned that actually you can join a new job. Nine months down the road, I never physically met people [I am working with].

Carmen: Like you, I've never met in person, anybody on the team. It's been a fully remote onboarding, which for finance works, but I think depending on the company and how developed their finance area is, whether that helps to make that transition easy or it helps to make it challenging.

[Also, my new team] is in the process of developing the finance [discipline] and so a budget is definitely key. It's our starting point to know, and to help explain to people this is why we can do this, this is why we can't do that.

Raja:    I think something important in 2020 especially with COVID is that FP&A has gained a lot of prominence in the organization. All roads lead through FP&A; we're much more of a central group, so a lot more visibility for sure.

Mitch: Tracy, we can't hear you. Sorry...your microphone is just not picking up…so we also learned that technology can work or not work!

Tracy:  We made better progress this year than we could have or would have made in two to three years in a normal situation on change management, electronic record conversion, new technology platform, adoption, cost consciousness and efficiency. Also, similar to what Raja said, FP&A was elevated as we do what is critical to the decisions that the organization needs to make. We paid more attention to what is more important, staff engagement and customers.

Pete:   This is the first time our CFO actually shared the forecast with the entire management team. We do a monthly management meeting online and never had shared the forecast before, but this time we did, [along with various scenarios.] People were surprised at how much revenue we lost, and basically what happened for the year. It opened people's eyes. It also let people know that this is what the financial planning group does; it was not coming from the accountants.

Kristine: I must say that I did learn that you can actually produce a human being, and it be a pandemic when you still come out of it.

The thing that surprised me the most was no matter how many shiny new objects we have with tools and systems and technology, the reliance of FP&A on the traditional Excel, still surprises me to this day. It's like, that's the one and our guiding star, basically, North Star. And I don't think it's going to change either.

Geetanjali: I don't know about all of you, but the amount of money or expenses that has been saved on travel, the rent you still had to pay, utilities, janitorial, coffee to people add up! When building the budget for next year, we are adding those items back in as a ramp up.

Pete:  Yeah, we saw a 50% drop in office supplies.

Jeff:     As we planned for 2021, we completely zeroed out everybody's travel expense, and you had to get SVP approval to put anything into the budget for travel.

Mitch: But companies have been able to still generate sales and still have their sales teams get together and do all this stuff without having them traipse all over the country. At some point, someone is going to look at the effectiveness of that travel spend, because I think what we've seen this year is it wasn't really required.

DJ:      Yeah, that's one thing I've seen in the recruiting area for our university business students. Everything's gone virtual, we zeroed out all of our travel budgets because we used to take students to New York and Chicago for recruiting trips. That's all gone. We've had students that have gone through internships and getting hired to full-time positions. And it's all been virtual.

Tom:  I can offer a different perspective. We're a manufacturing company, we make tires and we have physical plants We've cut travel dramatically like everybody else. But our leader of operations is very motivated to get back to traveling and physically go around the world and look at the operations. We're struggling to meet demand, and to physically walk around a plant and look at what's going on and observe things is important.

The sales folks also want to travel, but I'm more skeptical that's necessary in the new normal.

Kevin: I'm a big traveler, personally and for work. My role is kind of more operational finance, and it's being more in front of people. My boss and I started actually traveling a little again; in September we were on the road for six weeks and then the spikes happened again, so we had to bring that back and stop again. But we foresee traveling happening again for our operators in 2021 back to full capacity.

Bryan: So many great insights…really wishing everybody a safe holiday season, and a healthy 2021

By Bryan Lapidus, FP&A