The Top CFO Trends for 2021
For most of us, the majority of 2020 was spent in crisis mode. Employees, companies, and entire countries had to change their way of doing business in response to Covid. And naturally, we learned a few important lessons along the way.
This is the subject of our latest ebook “CFO Trends for 2021: what top CFOs learned from Covid-19 and how to apply these lessons in 2021”.
In this article you'll find an overview of the top finance trends for 2021 - gleaned from over 50 events, AMAs, interviews and surveys conducted by CFO Connect & Spendesk this past year. You'll find each point covered in much more detail in the ebook, which you can download for free in English, French, or German.
Trend #1: Extend the cash runway
No surprise here: in a CFO Connect survey of finance leaders from March 2020, 66% said that cash flow management was their biggest concern in 2020.
This year, many companies discovered that cash flow wasn’t as easy to manage as they’d hoped. They couldn’t easily tell how much they spent each month, or how these payments were created.
Perhaps the biggest lesson from 2020 is that companies need access to spend data. You need to know where money is going from day to day. When times are good, this tells you which of your investments make the most sense. And if we see further difficulties in the coming years, you need to know which taps to turn off, and how.
Based on CFO lessons from 2020, here were the 5 takeaways for better cashflow management in 2021:
- Create a crisis plan for cash management
- Ensure easy-to-access financial data
- Open communication with suppliers
- Find short-term advantages
- Explore government assistance
Trend #2: Budgeting & forecasting
In that same CFO Connect survey (mentioned above), “budgeting and reforecasting” was the second most common concern for CFOs during Covid. This was the task that occupied most of their time and brain-power.
In virtually every webinar and AMA, audiences wanted to know how their peers and experts were forecasting the year to come.
The crucial lesson of 2020 is the importance of having an established forecasting process. You can’t afford to waste time starting from scratch every time a new situation arises.
Instead, identify your key levers for revenue and losses, and understand how to massage these based on any new data you have.
Based on these lessons from 2020, here were the top 4 tips for better budgeting & forecasting in 2021:
- Find your growth levers
- Set your forecasting rhythm
- Build forecasts from the bottom-up
- Keep your forecasts focused
Dive deeper into this topics in our free ebook CFO Trends for 2021!
Trend #3: Data, automation & tools
Businesses that had to stop everything and rebuild their processes in 2020 lost months of productivity. The ones that already had good automation and a digital-first approach could essentially carry on as normal.
This year’s lockdowns made the issues with old fashioned processes plain to see. “I spoke to one client who had particular trouble with their accounting,” says Spendesk CFO Fabien Dawidowicz. “They used outsourced accountants, and this practice was still doing things on paper.”
“So when lockdowns began in March 2020, they literally couldn’t access their accounting data. And there was no way to close the books.” This is a clear example of how choosing not to modernize can leave businesses in real trouble when circumstances change.
Based on learnings from 2020, here were the top tips from CFOs on how best utilize data, automation and tools in 2021:
- Identify processes that need updating
- Automate as much as possible
- When in doubt, use the Cloud
- Ensure that vital company tools work together
- Some of the top recommended tools were: Chartmogul, Spendesk, Microsoft Excel and Azure, Netsuite, Power BI, Blendo, Xero, Slack, Confluence, Quickbooks, Carta, and bill.com
Trend #4: Remote team management
Every company became a remote company in 2020. And many were pleasantly surprised to find that their teams were just as (if not more) effective working remotely - if they had the proper tools in place.
2021 will likely bring a new balance. Many teams will hurry back to the office the moment it’s open. Others will decide that rent and electricity are unnecessary expenses, and their teams prefer to work from anywhere.
The biggest lessons that finance teams learned is that remote-friendly tools & procedures were essential to keep business running, in 2020 and beyond. The key tips for remote team management in 2021 were:
- Embrace remote work
- Prioritize remote processes
- Use flexible tools
- Revisit “normal” office capacity
- Hire remote-capable talent
Read all the details in our free ebook CFO Trends for 2021!
Trend #5: Moving beyond Finance
One of the key takeaways from our countless interviews and webinars in 2020 has been that, despite having “Finance” in the job title, CFOs today need to be far more than finance experts.
While our surveys showed many CFOs were feeling better prepared and more optimistic about the future of the company, topics like “employee motivation” and team spirit are now major concerns.
Even though most found that remote work was technically achievable, they were less confident about their teams’ overall satisfaction.
This emphasizes the fact that often the most successful CFOs bring far more to the company than financial expertise. They’re leaders, great communicators who can inspire and motivate those around them.
Based on the lessons learned in 2020, here were the top tips for moving beyond finance in 2021:
- Keep improving on communication
- Be more transparent with your team
- Prioritize employee mental health
- Lead with technology
It is clear that 2020 has been a difficult time for the vast majority of companies . With few exceptions, companies have had to optimize their workforce, become agile, and learn to operate with less.
On the bright side, the crisis has forced companies to put their organizational model into perspective. This has led teams to be more efficient, innovative, and more adaptable for whatever the future holds.
Read more about how finance teams are feeling about the future in our latest CFO Survey results.