The sudden spike in the Covid-19 cases, followed by the restrictions and lockdowns, has massively impacted every business and the Indian economy. Companies are reeling under challenging situations due to supply chain disruptions and social distancing norms in place for an unexpectedly long time. During such unprecedented times, it is critical to keep track of the company’s cash flow, which is the mainstay for any business. To do so, the CFOs need to focus on evaluating the business liquidity and introducing various potential paths to thrive amidst such trying times.
Role Of CFOs Amidst The Pandemic
With unprecedented challenges that the companies are facing due to the second wave of the pandemic, they are focusing on finding newer ways to manage their finances to keep themselves afloat. Nevertheless, making it all the more critical for Chief Financial Officers (CFOs) to introduce innovative ideas and better decision-making. Since CFOs play a crucial and central role, they must strive to stabilise their business model and position their company at the top.
Going Paperless With Digitisation
Even today, numerous companies are dependent on paperwork and old manual methods of working involving piles of spreadsheets and documents. Such companies face tougher times than others as they spend a lot of time generating and analysing data to prepare a workflow. Instead, CFOs must instantly act upon bringing automation and digitised working methods in every department, starting from finance to business intelligence. Leveraging technology will not only make their business competitive but also help in smooth functioning with banking channels, exports and imports, etc., systematically.
Keeping Resources In Hand
Most businesses during the pandemic faced an immense liquidity crisis, given the sudden drop in demand and revenues in the market. The immediate need for every other company was to make sure they have a healthy cash flow in hand to manage their expenditure, supply-chain, and smooth running of operations. CFOs, in this case, need to work on getting a stable cash flow for their company to maintain an impressive balance sheet to receive external working capital requirements. With effective business models, CFOs can reduce their sales receivables patterns and mitigate unnecessary expenses.
Foreseeing Unexpected Changes
Experiencing unexpected challenges caused by the pandemic must have made every CFO prepare a well-designed strategy by now to face any such turbulent times in the future. Risk management and planning beforehand will ensure that the company is well-prepared to make headway from any such circumstances.
Employee Well-Being & Communication
Even though CFOs implement every possible strategy to fight against the unknown, they can’t achieve success without their employees and fellow leaders. Starting from cost-cutting measures to new credit lines, they will require their stakeholders to be aware of the strategies. On the other hand, sending out the right message to their vendors or customers is also essential. Therefore, a robust and transparent communication plan with the stakeholders and instilling confidence in employees should top their priority list.
Last but not least, effective utilisation of resources, re-shaping business portfolio with modern-day tools like Capvel, and boosting productivity are the most critical. Amidst crisis, to enable the corporation’s pursuit of impactful moves, CFOs can build smaller groups of skilled executives, focusing all their efforts on strategic planning. Better investments, productive initiatives, and portfolio shifts will help the company thrive and outperform every situation.