A year ago, most finance professionals would have had high hopes for the start of the new decade. Unfortunately, 2020 has turned out to be a very difficult year — albeit with a few bright spots. So, what can we expect from 2021? Members of the UK Regional Advisory Panel for the Association of International Certified Professional Accountants in a recent video consultation shared their thoughts on likely upsides and downsides of next year.
They identified the upsides as:
1. ‘Value partnering’
A major development in recent months is the rise of the finance function as the “value partner” to the business. Ongoing political and economic uncertainty mean that other functions are increasingly turning to finance for support with critical decision-making, particularly when it comes to protecting the value of the organisation. Expect more value partnering in 2021. (Examine the CGMA report Building a Better Business, Together and the article “Take the Next Step in Business Partnering”.)
2. Experience gained
Finance professionals at every level are gaining a huge amount of experience as a result of the pandemic, and this is set to continue. As well as getting to utilise new digital tools, they are working on scenario planning and helping to shape strategy. Junior staff are using digital channels to connect with senior personnel across the business. (For insights on uncertainty and planning, read “How Resilient Is Your Strategy?”)
3. New perspective on work/life balance
Organisations are rethinking the concept of the workplace as a result of the pandemic. Going forward, it’s increasingly likely that finance functions will mostly work from home but use the office as a space to collaborate. In theory, this should enable finance professionals to get a better work/life balance — provided the boundaries between home and work don’t become blurred. (Hear more in “5 Ways Employers Can Aid ‘Counterbalanced’ Lives”.)
4. Chance for a business reset
Many organisations are using this period to reimagine their business. That might mean developing new products or services, or parting ways with customers that are no longer profitable. It may also mean revising processes to make the organisation more effective and efficient. Finance professionals are getting actively involved in these business resets, which should further enhance their standing as value partners. (Read author and adviser Amy J. Radin’s tips in the article “How CFOs Can Enable Innovation Now”.)
The UK finance leaders also highlighted these potential downsides of 2021:
UK businesses face a double dose of uncertainty at the moment, with both COVID-19 and Brexit to contend with. This uncertainty is likely to persist for the foreseeable future, making it difficult for them to plan. Some sectors are more affected by the ongoing uncertainty than others — commercial real estate, hospitality, manufacturing, retail, and transport are among the sectors facing certain challenges right now. For other sectors — such as clean energy — government policy potentially makes this a time of opportunity. (See the article “CIMA Makes Recommendations to UK Government on Post-Pandemic Recovery” for a summary of recovery-related proposals.)
2. Resource and communication challenges
As organisations embark on cost-cutting programmes, they are not necessarily replacing finance staff who leave. This leaves existing team members to bear a heavier workload. Also, remote working can make it harder for finance professionals to stay tuned in to what’s going on in the business and to keep lines of communication open with colleagues in other functions. (Read more in the article “5 Business Strategies for Success During the Pandemic”.)
3. Cybersecurity threats
Cyberattacks are becoming more sophisticated. At the same time, remote working increases the risk of fraudsters circumventing controls. Finance professionals can therefore expect to pay more attention to cybersecurity and the impact of remote working on their organisation’s control environment. (For more, read “Stay Vigilant Against These 5 Data Security Risks”.)
4. Difficulties with developing junior staff
While many junior finance staff are gaining valuable experience during the pandemic, some are missing out on learning from more experienced colleagues because they are no longer sitting in the same office. In addition, some training budgets have been cut or programmes have been halted because of competing demands on finance’s time. This could potentially impact on their career progression in future. (Explore “5 Ways to Reskill for a Post-Pandemic World”.)
While they anticipated both positives and negatives in 2021, the finance leaders we spoke to were broadly positive about next year. The decade may have got off to a bad start, but better times hopefully lie ahead.
— Andrew Harding, FCMA, CGMA, is chief executive–Management Accounting at the Association of International Certified Professional Accountants. To comment on this article or to suggest an idea for another article, contact Oliver Rowe, an FM magazine senior editor, at Oliver.Rowe@aicpa-cima.com.