As we head into the new year, we asked finance professionals on AFP’s North America and Middle East and Africa FP&A Advisory Councils to share what they learned in 2022.
The lessons that they have learned reveal trends and challenges for the entire finance community to keep in mind. Check out their responses below, then see goals for 2023 from members of the FP&A Advisory Councils.
As individuals and as a department, FP&A is still evolving
“This year reinforced that the work is never done in FP&A. We must continue to develop our skills and stay connected to what's happening in the industry so that we can best support our organizations. There will always be economic, industry or internal shifts and FP&A must be ready to respond,” said Nikita M. Miller, FPAC, director of facilities and financial planning and analysis, The Kresge Foundation.
“FP&A is under the finance structure on paper, but in reality, FP&A should work everywhere and with everyone inside the organization,” said Mohamed ElRouby, FPAC, global finance lead and CFO Middle East Africa, Pharmanovia.
“Too many businesses are completely unaware of what a real FP&A service offering looks like. Sadly, many accept (and approve) planning and budgeting as a rudimentary ‘fill in the spreadsheet’ exercise and are unaware of the FP&A process (and discipline) behind planning, budgeting and forecasting. As FP&A professionals, we have an opportunity to foster more awareness,” said a member of the North America FP&A Advisory Council.
“Whenever I learn something new, I feel how much I still don’t know,” said Reda Shousha, FPAC, finance manager, Automotive Distribution & Marketing Co. Ltd.
“In order to learn, disrupt and grow, it's important to get comfortable with the uncomfortable. This year included many internal and external business disruptions. The focus on agility practices and anticipating change provided me with opportunities to better project scenarios and prepare for uncertain times. And attending AFP’s annual conference was amazing; the event offered numerous benefits and learnings related to my Finance field that I implemented into my professional landscape,” said Hector Rubalcava, FPAC.
FP&A needs to refine its methods and processes
“I knew it already, but I've seen so many issues come up this year because the basics either aren't in place or haven't been done correctly. It's very difficult to do the value-adding business/strategic partnering when you can't be sure that the numbers that you are looking at are correct!
“I also learned the importance in a fast-moving environment to make sure that discussions and efforts are focused on areas that are going to add value and as a leader to guide people away from analysis that isn't going to help get decisions made and drive the business forward,” said David Gold, regional finance director, Northern Europe, Covetrus.
“Finance can best serve the needs of businesses that are facing sustained volatility by changing how we look at analysis, budgeting and forecasting. We need to leverage tools that make sensitivity analysis and ‘stress testing’ easier. Simply working up point estimates is not sufficient.
“We need to set aside time to lead conversations with Operational leaders and the focus of these conversations needs to be gathering input from them regarding what changes they see taking place in the business. From these qualitative discussions, we can look for ways to quantify what is directly pertinent to the changing needs of the business,” said Betsy Maclean, chair for audit committee and independent director, mCloud Corp.
“Managing budget cycles in a disruptive supply chain cycle, including the disruption of global wars and conflicts, affects local value chains! This [macro volatility] puts increased emphasis on managing working capital in an era where input costs to the business are uncertain,” said Hendrix Kazungu, business controlling & FP&A manager (ELN), Danone.
“The emphasis on cash management and forecasting is more important than ever,” said Eric Ellis, CFO of the National Restaurant Association and member of the AFP Board of Directors.
Technology remains an opportunity
“The biggest takeaway for me this year as I serve the entirety of our Finance department is that change is inevitable, but helping others see the bite-sized next steps can make change more palatable. My role sits at the intersection of Finance (business) and IT, so I am often facilitating conversations that push the envelope of traditional business practices. However, I cannot successfully partner to assist Finance to drive towards the future of work without helping them embrace that change is coming but they're not alone along the journey!” said Camille King, FPAC, CTP, principal team leader, financial solutions, Chick-fil-A Corporate Support Center.
“Robotic process automation (RPA) and artificial intelligence (AI) became key drivers of value but also a challenge for finance professionals,” said Reda Shousha, FPAC.
“I have learned that FP&A is going through lots of involvement in operations to operationalize the new concept of xP&A. Unfortunately, many companies still limit the FP&A function to be about financial planning and few engage them in strategy and operations for various reasons, including lack of support to realize the real abilities of FP&A. This past year, the uncertainty in the economy, industry and geopolitical factors drives the huge requirement to unleash FP&A and perform the desired activities to adapt to uncertainty,” said Sultan Mujallid, FPAC, head of financial planning & analysis, Saudi Air Navigation Services.
What’s next for the year ahead? Check out goals for 2023 from members of the FP&A Advisory Councils.
Ready to take your FP&A practice to the next level? Check out the FP&A Maturity Model.