Create the right crisis action plan from a financial perspective
During the global pandemic we are facing today, there’s really no perfect way to manage a crisis. Specially since we are so unsure on how much longer this situation will go on for.
Companies, small or corporate are all facing difficulty and uncertain times.
This is great news for financial companies like Haslle, because businesses more than ever need our financial leadership, know-how and best practices during these uncertain times.
We have utilized these times to share our knowledge and expertise in financial management through various different blogs posted on our website.
So as a CFO, or a finance manager, you have the data, skills and wider company perspective, which can help you guide the business through this unprecedented circumstance.
How can you utilize all that knowledge to form the best action plan to guide your company from a financial perspective?
Step 1) Efficient Communication
Going through an overnight change in company management where everyone is now working from home, managing finance needs the best tools and applications to stay in communication with other teams more than ever.
Every company has to make sure that during these times, all employees will have the tools and materials they need to work. Specially, communication tools efficient enough to make sure all teams can stay connected and in contact during working hours.
Obviously, everyone needs a computer or a laptop with the right SaaS tools to work in the same conditions as they would in the office. An example is company VPN so everyone will be able to access the company intranet from home. Or using a tool like Haslle to manage your subscription, employee expenses and budget approvals from any of your devices remotely, whilst having access to all the real-time financial data of your business.
Your company may be hiring during the pandemic and therefore you also need the right tools and onboarding and induction sessions to fully welcome your new employees to the company. Setting virtual meeting with managers and their colleagues could give them a chance to get to know their co-workers and get acquainted with the business procedures of your business.
Whilst employees work from home, there’s a risk that employees become unmotivated, disconnected, and their mental health may take a hit too. As a manager, you need to make sure that by positive reinforcements, you keep their motivation high whilst making sure they are handling these times well.
From setting up virtual meetings throughout the day, asking your team to bring their coffee and chat about anything or setting mental health, ergonomics and physical wellbeing sessions with medical professionals, you can make sure they have no worries on their minds and you give them the support they may need to be able to work efficiently from home. Communication is key to reinforce your company's culture, whether that is organizing Netflix party on Fridays instead of your Friday events or scheduling virtual yoga sessions in the mornings to replace your office gyms or gym membership discounts, your employees will be ensured that they will still be able to benefit from all those activities even from home.
To make sure your employees stay inter-connected even from home, they should be able to have informal conversations with their colleagues even whilst working from home. You can create this space for them by using a fun Slack channel or any other tool you may already be using at your company.
To get back to how financial teams will benefit from these tips, you need to make sure you have a 100% transparency with your financial planning.
You may be stopping hiring processes to save money to pay your existing employees.
Before announcing budget or investment cuts for different departments, you need to make sure you show full transparency to your employees and you make sure they fully understand the bigger picture. This could be formed by setting a virtual meeting and having the director of finance or the CFO comment and explain why certain financial decisions are being taken and how they will help the company survive these unprecedented times.
You can show flexibility by allowing team members and managers from different departments have a say in the financial decisions you are making for the business.
Step 2) Create a Crisis Action Plan
Now that you have a plan on how to make sure all departments stay connected and can work efficiently from home, it's time to build a response and action plan during this crisis.
Firstly, you should be consider a few questions taking into account remote work conditions:
1. Would you be able to reach your financial targets under these new conditions?
2. Would you cash burn rate change, or could you keep it at a reasonable level?
You need to have a refocus plan, a plan to guide you through the crisis. To build this, you need to monitor incurring costs, through reducing revenue and inefficiencies. You also need to assess new potentials of saving money.
You should also invite other team leaders to re-assess their game plans and change it to better fit these times.
Your service/product should be useful for your clients during the pandemic. Whether that means rethinking your business plan or just simply going online and enter e-commerce.
As the financial department, you can help these business decisions by discussing and re-purposing budgets and sharing incremental turnover figures to assess whether the ideas will be profitable.
Step 3) Re-evaluate and Re-forecast your Cash
Controlling cash in business is very important during the pandemic. Monitoring cash in and cash out should be a priority in finance teams.
Does the pandemic have a major impact on revenues? -you’ll need to look at costs and try to re-assess savings.
But if it doesn't, then you can essentially continue as before.
Wherever your company is situated, you should start by looking at what the government measures has proposed for tax and social security.
Have you re-forecasted your cash for 2020? This is a huge topic for CFOs and FP&A teams at the moment.
Your team needs to be developing a forecasting model and track the actual data each month. If your financial department doesn't currently use any forecasting models, now is the best time to kick off a forecasting model. This won't only be beneficial to your finance teams this year, but is a great foundation to be built, no matter how big your company is.
The financial team should rework on the financial forecast at the very least each quarter after importing the actual data into your forecasting model. Due to the high volatility existing in the current market, your data and model most be up-to-date and updated with any change in the economy that may arise.
Step 4) Get in touch with your Suppliers and Customers
As a CFO, you need to make sure your company will be able to keep up with their payments. It can be anywhere from internal payments such as payroll, overhead costs such as utilities, rent or insurance, or it could be payments to external entities such as advertising agencies, suppliers or distributors.
Keeping a good relationship between your suppliers could really pay off during these times. They may be able to show you a bit more flexibility with payments, extra discounts or extra time to pay the invoices.
However, if you can afford all your payments, you should make sure you pay all your suppliers, employees and bills. Keeping on your word during times like this could really strengthen your bond with your suppliers and employees.
You should also consider that the pandemic and lock-down may go for another few months. So take the time to talk to whoever you need to pay to understand their exceptions and come up with arrangements in-case you have difficulty paying them in full or in time.
Again, you should check how your government may help businesses during these times. They may ease bank loan re-payment plans or help you from getting evicted for your place of work. These solutions will help you optimize your cash in emergency situations.
And to get to getting in touch with our customers, we are a business here to essentially help businesses and individuals manage their spending. Our social obligation guides us to post more financial content and free advice on our website, offer free trials and help our product engineers better fit our SaaS tool into your life during the pandemic.
Times like these will prove the value of businesses like Haslle for lots of companies.
And consequently, we are signing new clients during the pandemic who faced with employees working fully from home and remotely, they need something user-friendly and quick to set up, whilst giving the real-time data analysis access. And Haslle is perfectly suited for that.
To sum up, even-though 202o is not going as most companies had planned, working remote has been a fascinating experiment. Businesses now learn the outcomes of all the workforce working from home and how agile-working may be beneficial in the long run. Flexibility and real-time data is now more important than ever and you need the right tools to help you achieve that.
Most of all, this period identifies our biggest priorities for us as a business. We now know what the essentials of running a business are in deeper understanding.