The pandemic brought a whirlpool of changes, posing threats to businesses, analytics, planning, etc, and leaving CFOs in a hoax to manage the challenges and find out ways to tackle them. CFOs were hard-pressed not to consider Covid-19 as a downfall but to set new priorities for their role. They can serve as a rock, a trusted player and an arbitrator in times of crisis. Though the pandemic was declared the worst economic crisis, it was impossible to not focus on its downfall. According to McKinsey's research, 84% of the respondents stated that the pandemic was an imminent threat to the global economy.
Since CFOs are the financial leaders of the company, they have contended the top three priorities for 2023 which are cost management, financial performance, and growth (inorganic and organic). In 2023, cost management has continuous uncertainty relating to inflation that is somewhat unsettling and CEOs need to understand the costs and stabilise them. Concerning growth, CFOs have proposed that more investments in products and services, focusing on M&A activities can turn the picture up. CFOs play a strenuous role in changing the financial stability of the company and need to be on their toes in times of crisis. To cover all the long-term and short-term crises, some of the priorities to be set right according to the leading CFOs are worth mentioning.
Make people the priority - Covid-19 made us realise the importance of our workforce, and most of the CFOs emphasise attracting and retaining the right talent in the company. For their well-being, focus on their health, daily challenges, tasks provided, etc. and for their safety, prepare a virtual set-up office for their convenience. In this direction, another thing to focus on is having a backup staff member for the work in case of any mishap.
Focus on the digitisation of businesses - The pandemic has shown a rough picture for stressing the digital presence of business. Furthermore, the CFOs lays stress on businesses to have the capacity to digital. For attaining this objective, more investments are made in the technology sector to ensure a crisis-free time ahead.
Divulge the true aspects of the business - CFOs focus on disclosing the financial and non-financial value of the business. Long-term value drivers like customer relationships, social contributions, etc. must be reported to the stakeholders. The key is to have a clear understanding of the company with the stakeholders. Making them aware of the company issues and what decisions are being made to tackle them will help the stakeholders to get the right picture.
Prioritise the security and control of liquidity - Identifying and understanding the liquidity of the company, focusing on the sources of cash generation and understanding the payments to be made. In the end, managing the cash transactions and checking for aspects where we can save tax. These directions will impact the revenues generated in the company and the cash flow system. CFOs have to consider the position of the customers and suppliers and offering discounts when possible can change the scenario.
Mitigate the risk and maintain risk administration - Management of internal and external systems affecting the costs in the company needs to be governed. That includes managing the internal employees and their way of work impacting the business and focusing on risk management. CFOs have to remain vigilant in determining the risks that increase costs and be prepared for the uncertain risks affecting the financial stability of the company.
In the end, preparing for the crisis is a smart step but the reaction and the steps to be taken will determine all of the planning. CFOs have to keep planning, strategizing new aspects, and focusing on all the techniques that can help in maintaining the financial stability of the company. Further, they must be cognizant enough to reciprocate in the crisis & develop better strategies to mitigate the risks. Also, having a clear picture of the liquidity and a better tolerance with the stakeholders will secure the company on various fronts in the crisis in the long term.