As the COVID-19 crisis is creating a lot of uncertainty day by day, CFOs and finance executives need to take swift actions to ensure they are heading the organizations, employees, shareholders, and themselves in the right path.
Business depressions and recessions are challenging, but some businesses and start-ups are not only staying afloat but are also finding innovative ways to seize new opportunities and position and re-invent themselves for future growth.
As this crisis is unfolding, CFOs may require new mechanisms to act swiftly and also rationally. CFOs play a key role in maximizing their runways by identifying and planning for resources that might be needed for their companies to reorganize and stabilize themselves during these uncertain times.
The CFOs also need to consider workplace safety and also budget for the measures to be taken for workplace hygiene and virtual operations to ensure business continuity. The following are the steps CFOs can take to help protect their talents’ well-being and support the success of virtualization:
Virtualization of finance and other functions:
Social distancing requires companies to virtualize work and finance as a function can be virtualized more readily than many other functions, such as manufacturing or store operations. CFOs should determine ways to enable their staff to connect online with HR and IT functions to elevate employee engagement overall. Few challenges they need to overcome are those discussions on issues that are usually done in person, will have to take place virtually. They should also work on developing measures for avoiding misinterpretations in a virtual work setting, where visual and social interaction are not usually possible.
Small scale companies and a few large-scale companies do not fully have access to virtual systems. CFOs should work closely with their CTOs to support essential remote access to key systems and data while also ensuring proper data security. Proper training and support will go a long way in helping employees adapt to the new systems and processes at work.
Learn to Leverage:
Identifying the levers and deploying them as quickly as possible will enhance results multi-fold.
CFOs who have a robust understanding of the current scenario should devise and work on multiple outcomes for the best- & worst-case situations. Some of the possible questions they should examine are “What are the potential supply chain issues?”, “Which capital purchases can be delayed until the market stabilizes?”, “Which discretionary spends can be adjusted, paused, or canceled?” They should also look at the available levers to use in each case.
For eg: Inventory management levers will play a crucial role for companies that have piled their inventory for the season. One approach could be short selling the inventory and procuring fresh goods in the form of bank guarantees
Drive analytical forecasting models to real-time scenarios:
The volatile nature of markets will make future revenue forecasting very challenging for businesses. The forecast models generally used are based on normal work conditions. CFOs will have to drive the workforce to incorporate real-time revenue and cash flow forecasts and plan for capital utilization & management. They also need to closely focus on the timing and size of investments needed to position the company for a rebound and competitive advantage and gain competitive positioning.
Establishing cross-functional teams with stakeholders from within, and external to, their organization to help understand and identify the inputs that will be critical for scenario planning.
The adverse impact of COVID-19 on supply chains has given an opportunity for CFOs to drive new and new contracts across various asset categories, from raw materials to real estate. During this uncertain period, it is time to buy options and make contracts at lower prices, but doing so will require careful consideration.
Analyzing and curtaining costs that remain under strict focus for the near future should remain the underlying principle. The future business will depend mostly on how well customers are able to recover from the crisis that pandemic has created for their company. Once the business stabilizes, the pivot towards shaping opportunities resumes, and in an environment where much will have changed.
A study forecasts that there is likely a chance for the increase in demand after the crisis. CFOs may need to shift their focus on thinking client needs through new digital channels, and design products/services to match their digital needs. We believe that this may be the right time for strategic partnerships with companies delivering breakthrough technologies to help you shape-up as leaders for a recovery.
One such offering is Zaggle Save, an all-in-one expense management software that helps you track business spends, submit expenses instantly, manage compliance, and find opportunities to save money. Submit expense reports on-the-go with Zaggle mobile app.
CFOs can stay on top of their employee business spends and have full control and visibility improve over the processes with our cloud-based expense management system.