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:
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.
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.
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