Financial Leaders Recap on Lessons Learned in 2020 (and Plan for 2021)
Procurify recently spoke with three fintech executives about their biggest lessons learned in 2020, and how they intend to future-proof budgets and approvals for success in 2021.
2020 has been a trying year. Businesses across the globe fought extreme uncertainty and spent much of the year re-strategizing in order to survive. For financial leaders, that meant abandoning goals and readjusting budgets to retain cash. It also meant restructuring teams and reducing spend by any means necessary.
Recently, we spoke with three forward-thinking fintech leaders to hear about what they went through in 2020, and to learn what they intend to do to battle the ongoing turbulence through 2021.
Introducing the speakers
Blake Oliver, CPA – Director of Marketing, Jirav
Jeffrey Roth – VP Strategic Alliances, Avalara
Bevan Van Der Berg – VP Finance and Operations, Procurify
Bevan is responsible for leading Procurify’s finance team. He has a strong focus on streamlining financial operations while working closely as a finance business partner with marketing, product, and sales.
The key takeaways
There was a lot to unpack during the webinar, and our guest speakers spoke passionately about the tribulations they faced this year, and how they intend to approach 2021.
Here’s what we learned.
1. Cash is critical
“Cash has become the most important factor for me,” explains Procurify’s Bevan van der Berg. “It’s important to understand cash management, understand where spend is going, and understand how you spend it. Having a runway allows you to make better decisions rather than act on knee jerk reactions, so it’s critical to level up your understanding of cash in order to survive.”
Bevan wasn’t the only executive to express the importance of strong cash flow, either. Jirav’s Blake Oliver explained that without cash in the bank, you can’t accurately forecast change. “You’ve got to be planning for the worst case scenario, and you’ve got to have the cash,” says Blake. “But when there’s a lack of connected planning – where your forecasting is not really connected to your budget, and your budget isn’t connected to your reports – you’re kind of doing all these things but they’re not holistic or collaborative.”
He continues, “The benefit of connecting all those things is that if you have a forecast connected to your budget, you can update and roll it forward every month, or at least every quarter. This way, you’re not working with some annual budget that’s already out of date because three months later COVID-19 had changed the game again.”
2. Adapting to change is the key to survival
As explained by the Greek philosopher, Heraclitus, ‘change is the only constant in life’. For businesses to survive, they must be ready to adapt quickly to a fast-changing landscape.
As explained by Avalara’s Jeffrey Roth:
“We have seen businesses transform before our eyes, and they’ve been forced to innovate, or in many cases, go out of business. That’s the biggest adjustment that I’ve seen – nothing right now is ‘business as usual’. It’s not ‘same old, same old’, and it just requires innovation to keep your business moving in a positive direction.”
When thinking about financial forecasting, looking at past trends no longer applies to forecasting for the future. “When it comes to financial planning and the modeling, you can’t just take last year’s numbers anymore and apply some sort of percentage change and generate your budget or forecast for 2020,” explains Blake. “This doesn’t work anymore. Instead, there’s been a huge increase in doing financial modelling and particular scenario planning. It’s important to create a good, bad, and ugly scenario and roll those forward every single month. This is really important because there’s so much uncertainty going on.”
3. The challenge doesn’t end when COVID-19 ends
This is an important point to raise. Ultimately, life won’t return back to normal at the precise moment when we overcome this disease. Unfortunately, many businesses will feel the economic burden of COVID-19 for years to come.
“I don’t mean to be a downer, but I think we need to be realistic about the economy after COVID-19,” Blake explains. “Things are not going to go back to the way they were. I think that buying habits have fundamentally changed and we’ve got to keep planning for uncertainty. It’s going to take years for this all to shake out and a lot of industries are going to be disrupted for a while.”
But with the right planning in place, businesses can begin to exit ‘survival mode’ and can continue to spend and grow through an economic downturn. All that’s required is a clear vision. As Bevan explains about managing expenses:
“It’s important to be clear on your spending guidelines and understand what the new year will look like. Go through what your key priorities are and communicate them clearly. Because there has been reductions and controls in place through 2020, it’s given us the opportunity to really dig into all our expenses. Do we really need two tools to do one thing? No. Do we need X number of licenses to be able to achieve what we actually need to do? No.
Everything got rocked, and now we realize that we can still function as an organization and we can still grow. Ultimately, we can still get things done without spending in these categories.”
4. Automation is the key to unlocking growth in 2021
For organizations, manual processes must become a thing of the past in 2021. Given that remote work is here to stay and cash flow retention is a top priority, improving operational efficiency through automation and getting clear on your fintech stack will define success or failure next year.
“There are so many ways to stay ahead of this,” explains Jeff. “Things can’t be done manually anymore unless your business is small and local. It is impossible for human beings to stay on top of tax law changes in every state, for example. So automating that part of finance is huge, and it’s just something that I think everybody should consider.”
Blake elaborates: “It’s all about automating with tech and finding a system that works for all the different needs of a business. With Jirav, for example, you can run multiple scenarios through the system and just roll forward your forecast. It’s not this big Excel nightmare every single month, and it lets you break down your forecasts from annual to quarterly or even monthly.”
Finally, community is key
“Keeping community going has been tough,” explains Bevan, “but people are flexible and adaptable during uncertain times.”
While we must address financial challenges in 2021, financial leaders must also take responsibility and find ways to retain culture and morale within teams. After all, working from home isn’t for everyone, and it can be an isolating experience.
For organizations, then, addressing the challenges of remote work and putting practical measures in place to retain company culture isn’t just the key to surviving, it’s the key to growth next year.
“A lot of our partners said they could never go remote and they would never go 100 percent online for years and years,” explains Blake. “Then, in two weeks, they were forced to, and it just shows you how adaptable we can be. I’m very productive at home. But building culture, retaining open communication, and battling Zoom exhaustion are all challenges we are learning from.”
To find out more about how fintech executives are future-proofing budgets and approvals for success in 2021, watch the on-demand webinar here.