The Role of CFOs in Contingency and Crisis Management

Posted by Cedric Joshua Martinez

Jun 3, 2020 10:00:00 AM

As leaders of their respective finance and accounting (F&A) departments, Chief Financial Officers (CFOs) are looked up to by F&A professionals during this global crisis. The role of the CFOs in contingency and crisis management is indispensable. Here are key points on the CFOs role in steering their departments in the midst of the ongoing global crisis:

 

Strategic management role lead by CFO

Risk management and mitigation leadership

No one understands a company’s financial position better than the CFO. Chief Financial Officers have the knowledge and expertise in assessing a crisis’s impact on sales, supply, production, and other areas of the business, and  This places them in the best position to lead the risk management and mitigation efforts of businesses.

 

Boosting financial planning and analysis

Crisis management and contingency require making a lot of decisions, often fast. It is important for executives to have the right numbers ready. Boosting your financial planning and analysis tools, analytics dashboards, and other relevant F&A software will help in making sure that CFOs and other C-Level executives make the right decisions with the right numbers.

RELATED: Tips for a More Effective Financial Analysis and Forecasting Process

 

Preparing for the worst-case scenario

Along with risk management and mitigation, CFOs are suited to ensure that liquid assets are available whenever possible. It is a best practice among CFOs to have a 13-week cash flow forecast as a standard report reference. This can help CFOs prepare cost-saving strategies and allocate resources where it is needed the most.

 

Creating a cost-savings plan and budget realignment

The ongoing crisis has changed the way businesses work. More people are now working from the comfort of their homes and some of them will be needing additional equipment to do so efficiently. On the other hand, this could also mean that you will be spending less on other items such as office equipment and rent. Also, availing the government assistance programs for businesses can help you stretch your budget during this pandemic.

 

Keeping the people first

Placing paramount importance on the safety and welfare of employees and other stakeholders should be the top priority. Doing so is not just a humane act but also a practical course of action. These people are the ones who can help their businesses keep afloat, especially during times of crisis. Like any other C-Level executives, CFOs must be able to determine how stakeholders, including employees, are affected by a crisis and what are the steps a company must take in order to protect them.

 

Chief Financial Officers have a significant role to play in strategic management and that companies can handle black swan scenarios and other crises well. With the help of the right tools, CFOs will be able to recommend to the management what steps they can take to protect their business and stakeholders, and come up with a proper contingency and crisis management plan.

Are you in need of a right-hand to help you manage your CFO roles? D&V Philippines is a reputable finance and accounting (F&A) solutions firm that offers a wide range of CFO support services. Download our “Premium CFO Solutions” white paper today and learn how our F&A experts can help you in your tasks.

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Topics: Premium CFO Solutions

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