6 Ways A CFO Can Guide Your Business Through The Pandemic

CFO

While governments work to safeguard society against COVID-19, businesses must move quickly to protect critical stakeholders and their finances. The abrupt interruption created by the coronavirus pandemic resulted in a global economic collapse. Financial and operational issues happen, and it’s up to business managers and owners to overcome them. While CEOs will use their expertise to steer their firms through difficult times, they will heavily rely on the chief financial officer or CFO inputs to make business financial decisions.

A CFO is a single corporate executive officer or entity who performs the duties of a chief financial officer for a corporation. Many startups and corporations are trying to outsource services to save staffing costs including CFO. Because of this, it increased the amount of virtual CFO services hires rather than hiring a full-time in-house CFO.

Here’s how a CFO could help a company get back on its feet through the pandemic:

  • Analyze The Present Financial Situation

CFO

To get achievements, successful leaders do three things well: set priorities, work with the right people, and manage connections. To keep the business afloat, they would need to pay close attention to cash flow and raise any capital they could. 

The current scenario is difficult for many. Collecting payments from delinquent customers should be a priority to boost the company’s financial status. When working capital is low, CFOs may seek a line of credit, joint ventures, or divestitures to raise funds. They may also desire to seek debt covenant relief. Currently, real-time liquidity tracking is required.

During a crisis, transparent and proactive communication with investors and boards is critical. The first several months are crucial for increasing communication frequency and transparency, and the CFO is responsible for this.

  • Implement Cash War Room

Cash is king in uncertain times, and liquidity is vital. Also, future financial shortages aren’t just a concern, but a reality for many.

To enforce strong expenditure controls across firms, CFOs need to create a cash war room. Customer payment delays require organizations to keep track of their cash on hand, as well as any additional capital they acquire, and CFOs to understand how all those assets are being utilized. CFOs will realize when working capital isn’t sufficient anymore. Finance leaders will require reliable technologies to give actionable knowledge that drives the organization. Establishing a cash war room is a smart starting step.

  •  Improve Productivity Through Digitalization

To cope with the pandemic, many people may need to work remotely, utilizing digital collaboration tools. But the finance team’s use of technology to assist the company is not exceptional. Automated closings and real-time predictions are now possible. After the crisis, the CFO and finance team will push for enterprise-wide digitalization. Financial tools like the cash war room, rolling forecasts, and collaborative dashboards can benefit the entire firm. In future emergencies, reliable reporting, informed decision-making, and company continuity are important.

CFOs undoubtedly have a lot on their plates. Modern software can solve many of the CFO’s greatest difficulties. Enterprise resource planning or ERP systems, for example, include modules for financial management, production, procurement, supply chain management, warehouse, and fulfillment. In addition, reliable, robust data combined with real-time speed and strong analytic tools assist CFOs and their teams offer the correct information at the right time for sound decisions.

CFOs will manage creative company strategies. Giving the right people the proper technology and data to manage risks, achieve compliance, and drive their enterprises to innovative growth is their biggest challenge.

  • Succeed In The ‘Next Normal’

A CFO must plan for a transformation mindset when allocating corporate resources if they want their business to prosper following a devastating economic crisis.

The CFO’s team should assess the company’s investment portfolio and focus on each business unit’s maximum potential.

During the previous economic crisis, resilient corporations divested 1.5x more than non-resilient companies. During a recession, profitable organizations can benefit from mergers and acquisitions. This may improve a company’s investment in mergers and acquisitions or M&A.

Remote working has become popular and productive for many firms since the COVID-19 outbreak. After the crisis, most companies should continue the practice. When the pandemic problem is over, CFOs should check the financial implications of a digital workforce. The CFO team can help the entire company and its subsidiaries scale financial predictions and collaborative dashboards.

  • Reassess Investment And Strengthen Balance Sheet

During a crisis, CFOs should examine goodwill impairments, reduce inventory, refinance debt, lower accounts payable and receivable terms, and so on. Balance-sheet cleaning can increase financial flexibility while keeping everyone focused on essential indicators during a tumultuous period. CFOs should help peers examine important R&D, IT, and capital allocations to improve the company’s investment portfolio. The pandemic is quite likely to have altered business units’ initial estimated returns on investments.

  • Manage Profitability

CFO

In the short term, companies are looking at their costs to flex and cut them. When the market takes up again, the challenge will be to balance cost reduction with rapid expansion. Critical resources may have been underestimated to the point that they cannot support future growth.

Finance should look at both sides of the profitability equation to avoid this error. Actions to reduce costs and generate revenue should be prioritized. Desperately seeking higher profit markets or goods, firms could shift resources. To minimize over-discounting by salespeople who are eager to make a sale at this difficult period, sales support could be focused on monitoring pricing.

Moreover, the analysis should probe the business, the operating model, the added value of activities, the sourcing model (in-house or outsourced), the demand/supply chain network setup, and so on. The CFO should aim high for a business-wide transformation. Now is the time to rebuild the fundamentals, to completely revamp the business model, and to prepare for the competition that’ll follow once we all emerge from this catastrophe.

Conclusion on Having a CFO

The CFO will keep all employees informed of the company’s crisis management plans. Effective communication dispels rumors, keeps staff focused and motivated. When planning initiatives, CFOs must evaluate both the best- and worst-case scenarios. No one knows how this global crisis will end, so they must consider all stakeholders, suppliers, customers, and employees.

 

small business coach

The Ultimate Manager’s Guide For Leading Remote Employees

remote employees

Ultimate Manager’s Guide For Leading Remote Employees

It’s no secret that remote employees are profitable for business. There is both a reduction in office maintenance costs and an opportunity to choose the best employees without being tied to a specific location. But how to get people you’ve never seen in your life to work effectively is a mystery to many leaders. Unfortunately, in such a situation, classical managerial skills are not enough. Soft skills come to the forefront in this system.

Confidence

Remote employees need to be trusted much more than the team that sits with you in the same open space. To be able to trust your employees, select future remote employees as carefully as possible, taking into account all the features of your company. 98% of leaders of remote employees fall into the trap of distrust. Usually, this disease is cured by the first emotional burnout or the first dismissal of a subordinate. Then, either you learn and rebuild, which is always painful, or realize that remote management is not your strong point and change your career priorities.

Carefully select remote employees for the team and lower the level of expectations. The result will please you very much.

Communications

The bad news is that a person assimilates up to 60% of information through non-verbal. The team loses this valuable 60% working remotely, which means they need to be replenished through an accessible and coherent communication system. It would be best if you found a task manager that is convenient for everyone. It is essential that tasks are not confused, lost, or duplicated. Everything should be transparent and straightforward. Next, create a single information space where public documents and everything necessary for comfortable work will be posted. It is also your team’s responsibility to know what technology tools to use to exchange information and how to send large files. And, the most crucial rule, always ask remote employees to talk about how they understand the task – this will save you a lot of time, effort, and nerves.

The most challenging thing is to drive the entire team into a single task manager and require all participants in the process to use it all the time. Here only time and consistency will help you, and then a habit will develop. A single information space and summaries of accepted tasks will help you make sure that everyone speaks the same language – the language of your business.

Motivation

Unfortunately, not everything depends on the salary. To get a person to work with a cozy and warm sofa with Facebook, and TV shows nearby, you need to give the team a little more than just a salary. The remote team needs common motivational meetings: all project participants must understand where the company is coming from and where, the difficulties, and what will allow the team to be even more effective. Be sure to support and implement employee initiatives. Try to praise and be grateful – more and more often than we are all used to.

Practice shows that only an employee who believes in and shares the mission and values of the project can work effectively remotely. Define and clearly articulate your goal, mission, and objectives. Please make sure everyone knows, understands, and shares them. And don’t forget to praise and support employee initiatives.

Rules

Unfortunately, all the skills indicated above will not help you if you do not have clear and unambiguous rules followed by all team members. Creativity and self-organization are great, but not where you do business. Achieving goals requires a system and regulations that are easy to read and understand. Build an organic and stable system out of everything. With your personnel selection use clear criteria and assessment systems.

Motivation

Establish Key Performance Indicators with a transparent reward system. The rules must be uniform and equally valid for all team members.

This point can be a revelation. After all, it seems that if you trust your remote employees in your team, everything is in order with communications and motivation, then the puzzle has solved. But no! It is important not only to define sane boundaries and clear rules of the game but also to reinforce the boundaries with all employees. The situation when everyone is equal before the standards precludes many contradictions and disagreements.

Summary

For the effective work of a remote team, you need to mix in equal proportions trust, intelligible communication, and clear motivation, and then season it all with rules. Congratulations, your remote team is ready to be managed!

 

small business coach

Top Ten Feats of Small Business Owner Superheroes!

That’s how you ended up a small business owner. Ok, admit it. You have always aspired to be a Superhero. That’s why when you were a little kid you read comics and watched cartoons. Recently you have watched many of the Superhero flicks. Inside of every small business owner definition is a Superhero. Superheroes are effective leaders.

You started your business to save the world. Only you can save customers as well as you; right? Then why are you suffering burnout? Why do you like Spiderman struggle to pay your bills? Why do you like Iron Man have a problem with getting help from others? Why do you like Batman have drama with your employees? You may be Wonder Woman, but you have issues too.

Small business owner superheros

The point is that no small business owner Superhero is perfect; we all need some help. It all comes down to effective leadership.

Top Ten Feats of Business Superhero’s

Here are some pointers for you to make sure your business can support your, ahem, hobby:

1. Do what you love in business.

Otherwise, learn to love what you do. The biggest reason for small business owner failure is a lack of persistence. The biggest reason for not persevering is that entrepreneurs don’t love what they do. Spiderman is always struggling to make a buck taking photos, but he needs to remember that it’s all about the big purpose. He needs to learn how to negotiate; he could make a killing on those photographs. He needs to become his very best at earning a living. Love what you do or get some help.

2. Be “the man with the plan” in business.

That, of course, includes you Wonder Woman. Every Superhero has a plan. Develop clear long term and short term plans. The important elements of a plan include your vision, your values, and your mission, along with specific goals and daily actions.

3. “Lead, follow or get out of the way” is not an option.

Thomas Paine’s famous words will not help you save the world. Superheroes lead and take action! Once you have developed your plan, you must translate the plan into daily actions and activities. Keep taking a bite out of the “elephant” daily. You will eat the whole thing over time.

4. Tell your business story again and again to prospects.

Learn to say who you are, “I am Iron Man.” Your story for your prospects is the part of your Vision, Values, and Mission that eliminates your prospect’s pain and solves his problems. Develop and memorize at least three versions of your story: a 30-second version, a 5-minute version, and a 20-minute version. Tell your story to anyone that will listen.

5. Tell your business story again and again to everybody else.

Tell your story through meetings, memos, advertising, employee manuals, etc.

6. Listen first and then twice as much as you talk. Notice that all good Superheroes listen before they take action. Diagnose the problems first. Otherwise, you may save the wrong person.

7. Keep the main thing the main thing in your business.

Focus on what’s important. Decide at the beginning of every year what will be your primary focus. Keep yourself and your sidekicks focused on that thing during meetings, and throughout each day.

8. Know the score in your business.

Batman and Iron Man have their technology and instruments and they use them to keep score. Is your cash flow important? You better have a report. Do you use monthly financials to make decisions? You better start.

9. Never stop getting better in business.

Iron Man built a better suit. Batman built a better mansion. All business superheroes are constantly learning and growing. Don’t forget your team (sidekicks); they need to learn too!

10. Develop deep relationships with sidekicks and victims.

Know your villains (competition) well too! Customers are victims as long as the villain has captured their service. Start developing deep relationships with those you want to save. Make sure your sidekicks are happy and stay on your team.

Conclusion

My editor tells me that this adventure has to end. Do the above as a leader and soon you will be known by the world as the small business owner Superhero that you really are. The next time you need to make a decision, ask yourself what your favorite Superhero would do in your situation. Soon you will be able to say along with Superman about your business, “Up, Up and Away!”

In the next article, I will focus on Strategic Planning.

About the author:

Alan Melton is president of Small Business Coach & Associates. He and his team work with an amazing group of entrepreneurs, small business owners, and executives who are getting on the fast track to achieving their personal goals. Alan has started ten businesses and acquired six more. Recognized by two U.S. presidents, Alan is a nationally known speaker, author, and award-winning business leader.

Questions about our small business coaching services?

Call us at 1-888-504-0777,

or 

Enter your information below to start growing your revenues and profits today…

small business coach