The New (financial) Year resolutions you should be making. And keeping!
Given the impact of COVID-19 and the economic downturn, there is no doubt that organisations will be facing a tough year ahead. Finance directors will be expected to navigate their organisations through these times, and there will be plenty of challenges for CFOs to overcome this year.
With that in mind, let us look at the solutions a finance director should implement to tackle the opportunities and obstacles that 2021 has in store. To get off to a good start, follow these New Financial Year’s Resolutions.
Unlike the real new year, when resolutions are broken before the fireworks finish, these ones can be kept and will have a material impact on your organisation.
I WILL start with the end in mind
The pressures posed by COVID-19 include disruption to supply chains and consumer behaviour. Will we get a vaccine or a second wave? CFOs should make it a Resolution to model the ‘what ifs’ and ensure that they are prepared for worst-case and best-case scenarios. With the continued ambiguity, it makes good sense to have a Plan B, C and even D. Finance professionals should use the first months of FY21 to plan for the various scenarios they might be facing in the next 12 to 18 months.
I’M GOING TO measure the right things
The key to ensuring the value of any report is to first establish its purpose, its user base and the decision that it needs to inform. When making decisions around corporate efficiency, the downstream impact needs to be measured against the medium-term strategy of the organisation. Organisations also need to be able to understand the underlying activities which drive cost. Financial reports based only on GL accounts structures do not give a full view of the KPIs which need to be considered.
I’LL roll with the punches
“Success doesn’t come from what you do occasionally, it comes from what you do consistently.” Marie Forleo
Regular rolling forecasting allows you to adjust the plan, measure against scenarios and accommodate recent changes or trends. This enables quick decision-making and agility. Because your outlook is updated continuously, you will always have medium-term data available to make important time-sensitive business decisions.
I WILL improve efficiency
Becoming more efficient is a timeless goal that will always help businesses to streamline their processes, reduce waste and focus on their key goals. A recent study conducted by the research organisation IDC (1), identified that the second biggest contributor to poor staff morale is the lack of efficient systems and complicated manual processes.
It found that “when employees are expected to spend more time searching for feedback and clearing up misunderstandings, things fall through the cracks and employees get frustrated” and companies can lose up to 20% to 30% of profit due to inefficiencies.
I WILL integrate my systems
“The Whole is Greater than the Sum of its Parts”
Imagine the difference it could make to your business if the key Financial data sources could be integrated into a unified platform, rather than working in disconnected, siloed data-marts.
A new generation of cloud-based financial planning and analysis software makes it easy to integrate several applications such as accounting platforms, enterprise asset management systems and CRM, just to name a few.
Now that you have made your resolutions, how do you keep them? Write them down, plan them out and contact us to help you deliver them.
Contact us to discuss and review your current Financial Planning, Analysis and Reporting requirements.