How Your Finance Team Can Help Right Now

Your Finance Team can help you navigate COVID-19

The coronavirus is putting financial pressure on businesses. It’s becoming crucial for finance teams to adapt. Economic futures are uncertain. Here are some quick wins to make a big difference and keep you in business.

Your CFO and finance team is crucial in helping manage through these challenges. Finance are at the forefront of business operations:

● Collecting cash
● Dealing with suppliers
● Fielding questions from investors
● Talking to key stakeholders such as Banks, Auditors, and HMRC.

As a result, your finance teams will often have a unique and pragmatic approach to dealing with problems.

Here are some simple tactics to help today.

Communicate: What is the Finance Team doing and how does it impact me?

Your CFO and finance team needs to explain to a few key audiences:

● What is the Finance master plan during COVID-19?
● Why you need to implement your plan?
● How can you help?

This will help to deliver a clear and consistent message across your teams. Especially if you need colleagues or other stakeholders to help.

Here are some examples:

● Investors: explain how you will protect the business and the expected outcome
● Colleagues: explain policy changes and clearly articulate what you need
● Suppliers: Identify key suppliers, and explain to them any changes and if/why you need help (e.g. payment terms).

Manage cash down to the penny

Much has already been written about how to manage cash at the moment. Here’s how:

1. Make a list of all the recent (last 3-6 months) and upcoming transactions
2. Bucket the transactions in a way that makes sense to you, such as essential/avoidable.
3. Question each expense carefully: Is it absolutely essential? What would happen if you did not do x?
4. Develop a SMART action plan & meet daily to deliver it.

If you want to read more about managing cash, please read our recent blog post here

Contingency/Scenario planning

Finance teams can play an important part in your contingency or scenario planning. In particular modelling forecasted outcomes. Most good contingency plans need a baseline P&L for your business. Then, layer on top what will happen if X becomes true? Most companies we have
spoken to are developing 3-4 realistic scenarios depending on the industry.

Ralston has built a simple contingency planning tool and you can access it for free here

Planning for life after COVID-19 / recovery

While most startups and small companies will be almost entirely focused on the immediate concerns of today, some will be looking through the fog into the future and asking “what next?”

Finance teams can contribute to this planning. Some questions that we have heard recently:

● What can we do to strengthen our balance sheet for the future?
● Reserves policy review
● Ways of working: how can the CFO & finance team deliver
● Evaluate opportunities for automation – at Ralston, we still see lots of unnecessary manual effort
● Real estate planning

Good Luck! We’d love to hear from you if you have success stories. If you need help, please get in touch.