Tips for CFOs during a crisis - back to basics

There have been a lot of articles recently on working virtually – indeed, we wrote one. But surviving the crisis – even, emerging stronger from it – is about what you do, not just where you do it. For CFO’s it’s about getting back to basics. Here are our top five tips for CFOs: 

1 Look after cash 

Cash matters much more in a crisis, and CFOs need to get much closer to cash generation. Forget the complicated accounting way of presenting it – just focus on simple inflows and outflows. Form a view on funding gaps, and then work out how to fill those gaps. Become an expert on any Government support available. Get ahead of the curve on this: it’s the most important area.  

2 Look forwards 

Many businesses have got used to stable markets, which means that forecasting becomes a mechanical process. In a crisis you need a different approach. Use ranges, not single point forecasts. Make the range wide – don’t be anchored to last year’s figures. And remember that the purpose of forecasting is to guide decisions, so focus on what will affect those decisions.  

3 Secure your assets  

In a crisis, basic controls on debtors (receivables) and inventory really matter. Get back to basics: look at where these assets are, and take a clear-eyed look at their real value. Make sure you have a really good sales credit controller, and make sure the salesforce has total respect for that controller. 

4 Understand demand  

Crises make it even harder than normal to read the direction of the business. Try to see the underlying consumer trends separately from stock effects driven by decisions in your distributors or customers. 

5 Stay close to the business  

Even though there will pressure to spend time with your finance team, make sure you stay very close to the business. Decisions will be taken faster than normal; be there, to give the right support. Be prepared to make decisions with less information than normal: remember, speed matters more than accuracy in a crisis. 

Finally, look after yourself. Crises test your resilience. Make sure that you invest in that resilience, both at work (talking to trusted advisors) and at home (family and friends).