How does the role of FP&A change with a potential recession or turbulent economy on the horizon?
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Principal in Finance (non-banking)a year ago
The role of FP&A shouldn't change remarkably with a potential recession or turbulent economy on the horizon. It does, however, require more attention and focus on risk management and exposure. While that should always be a consideration of FP&A, in more challenging times, vulnerability can be greater.VP of Finance in Healthcare and Biotecha year ago
I like to focus on what you can control versus what you can't. I'll probably learn more about the asterisks of what is going on in the world that could impact us, whether it is if we know there is a scenario we're seeing real-world impacts in our financials, or how we bring those forward. I think a lot of the time you get to the potential recession that fears and the analysis paralysis you can get into, it's definitely a burden that FP&A should look to avoid and focus on the aspects you can control. I think doing forecast accuracy and forecast frequency quarterly is sufficient. Closing is probably the one example that I would point to where we have to do forecasts on a weekly basis and monthly basis. There are probably some businesses where you do need to look at things weekly because of the situation you're in, but they should be the anomalies.
✔ Higher interest rates
✔ Lack of available talent
✔ Lagging digital transformation
Smart budget trade-offs, savvy talent strategies and optimal digital investments will all be key to success this year as organisations focus on:
1) Driving margin improvement
2) Generating cash
3) increasing productivity of people and assets
4) Capitalising on new growth opportunities with fewer resources.