If 2020 had a word to describe it, that word would be unprecedented. The last pandemic on this scale existed a century ago, a time when social media, air travel, and business as a whole was much different than it is today. But after this unprecedented year, what does 2021 hold? Uncertainty.
This according to a recent FloQast survey of controllers, who expect a lot of uncertainty in 2021. From planning to tactical execution, the instability and uncertainty of 2020 has bled into the current business landscape, in which financial controllers were forced to move forward with planning for 2021 with more questions than answers.
Surveying hundreds of controllers on their expectations for planning season, FloQast sought to understand how the unusual business environment of 2020 has impacted financial planning for 2021. Not surprisingly, they found that controllers surveyed face challenges, plan changes, yet still have hope.
Forecasting and Reporting Challenges Weigh Heavily on Controllers
Planning for 2021 brings new challenges for even the most experienced controllers. According to the report, 88% say 2021 planning is different than past years, with 84% finding that the uncertainty created by the tumultuous landscape has affected them personally.
With less confidence in revenue plans, a deviation from past financial assumptions, and concerns over the political landscape, many are worried about how the deluge of change will affect them.
Changes Put in Place to Deal with Uncertainty
Despite the pressures weighing on the controllership, many are taking steps to address the uncertainty. Multiple scenario planning appears to be one of the most popular tactics, with 73 percent continuing to formulate different views as they approach planning. What is new for 2021 planning is that companies doing multiple scenario planning are now in the majority. A quarter (25%) of controllers report that the uncertainty of planning for the coming year has them adopting this approach for the first time, bringing the overall number of financial teams using this approach to over 3 in 5 (62%).
Knowing this, many are bracing for the increased workload that goes into multiple scenario planning. 91 percent expect this will bring additional challenges, including increased complexity, difficulties identifying the triggers to move between scenarios in a timely fashion, and the ever present concern that comes when managing multiple versions of multiple scenarios.
But Hope Remains
After all the evil flew out of Pandora’s Box, one thing remained—hope. After a hard year, it would be understandable if controllers were concerned that 2021 could get worse. As a group that is professionally obligated to think about risk, a bit of pessimism would certainly be in character.
But one surprising part of the FloQast study? Many were optimistic. Fewer than 1 in 5 (17%) believe it will be worse and 62 percent expect 2021 to be better.
But to get the most out of 2021, hope alone isn’t a strategy. That’s why many appear to be turning to technology to facilitate their business initiatives. According to the survey, 96 percent see value in technology for planning in uncertain business environments like those we are currently living through. From enabling remote work to facilitating complex processes, many have and expect to invest in technology designed to facilitate their business.
Learn More: How COVID-19 Changed Financial Planning and How Controllers Are Tackling 2021
The entire FloQast survey titled How COVID-19 Changed Financial Planning and How Controllers Are Tackling 2021 digs a lot deeper into the questions and responses from those in the controllership. From the personal and professional impact that the last year has had on them to the specific changes in reporting that have taken place, we invite you to learn more about this here.