CFOs

Attention CFOs: Here’s how to protect your business through uncertainty

As the world slowly starts to reopen, focusing on these four areas will be critical for CFOs and business leaders.

CFOs

Running a business is difficult. Factor in instability and socio-economic challenges influenced by an ongoing pandemic, and it becomes downright impossible. But there are so many organizations that are persevering, regardless of the many challenges created in the past year. 

Business leaders are using these hurdles to create new opportunities, shift gears and improve processes. They’re leveraging change — if they have the agility to do so — and protect their business through uncertainty and risk.

This is particularly true for the finance role. More particularly, CFOs must be prepared to mitigate risk for their organization in both the short and long term. Here are key ways finance leaders can adapt and manage that uncertainty:

Plan business around liquidity

CFOs can overcome some uncertainty by making strategic real-time decisions that focus on the most urgent liquidity needs first. Naturally, leaders need to take immediate action to preserve cash flow, so prioritizing business needs will help focus your attention. 

 

> What can leadership do to raise more capital?
> Can we get a loan to cover expenses and operational costs?
> How can we speed up our invoice payments?

 

Partnering with a lending company that always has your back and can support you with speed and precision is important. It’s like having a special phone line to capital. 

Liquid Capital (as our name suggests) offers funding to businesses that need to meet business demands without adding more debt to their books. Using invoice factoring, businesses can sell unpaid invoices from credit-worthy customers and inject capital into their organization. This enables them to adapt to change quickly and meet the pressures of doing business today.

For example, Best Broadcast, a fast-growing AV company based in Toronto, Canada, uses factoring from Liquid Capital to overcome cash shortages in slower months to pay for operational expenses and employee wages. 

Adopt a hybrid work model

How CFOs work during uncertainity

The entire world has been working remotely for the past year. But as the world slowly starts to reopen, we’re seeing many companies bring on a hybrid work model to their organizations. Now, companies are offering their employees the chance to choose where they want to work from — the home, office or both — and many are choosing to adopt a hybrid work model

From a financial perspective, it makes sense for CFOs and business leaders to shift to a work setting that encompasses the best of both work modes (remote vs. in-office). When you have fewer people in the office, you’re not just cutting down on rent for bigger office space but also reducing the costs associated with keeping every employee in the office. Think office supplies, utilities, and those fully-stocked kitchens!

A recent survey indicates that 84% of CFOs and business leaders in a traditional work setting plan to bring employees back in waves, while 5% plan to keep employees working from home permanently. Obviously, the preference changes from company to company, so it’s best to analyze how much it would cost to take on a hybrid work model and offer flexible work opportunities to employees after running the numbers.

Use technology to upskill and reskill roles

In a world that is becoming more open to automation, finance has an opportunity to transform from being the gatekeeper of transactions into a strategic guide for their organizations.

This means helping teams upskill or reskill to manage macro-challenges and truly transform into a modern workforce for the CFO. The emergence of machine learning and data-driven technologies can drive up change and financial leaders should adapt their role to welcome more AI-based tools.

New technologies can streamline manual processes and help them make strategic business decisions with a long-term approach. Instead of being scared of robots or machines to take over the finance department, CFOs can also use emerging tech to predict the need for cash flow better and forecast any business funding needs that may arise.

Build trust and transparency

CFOs during uncertainity

Transparency is key to doing business today. And finance has its part to play in building trust and clarity among customers and stakeholders in their company.  

CFOs can do this by using up-to-date data from different sources and business functions and delivering central insights to everyone involved in an organization to drive better participation and enhanced decision-making. It’s vital that CFOs notify stakeholders about the measures they’re taking to protect cash flow and outline tactics to ensure preparedness during uncertainty. 

Business leaders and CFOs can ensure consistency when it comes to being transparent and honest:

  • Communicate regularly with employees about how the company is doing, changes that will go into effect to tackle uncertainty, and how it will influence them or their roles
  • Inform suppliers and vendors of real-time changes to avoid interruptions to their services
  • Bring up to date lenders on the need for cash flow and discuss discounts you may need in the present or the future 
  • Speak with investors to gain strategic insight and access financial support

Why change matters

Making agility the number one priority while supplying the organization with the right tools and direction to make better decisions is critical. And grasping how finance will achieve what the business demands — from any location —  along with a heightened need for trust and transparency is imminent.

But perhaps the most important is the need to reshift your business operations to focus on liquidity and the willingness to inject capital by partnering up with a lending partner, such as Liquid Capital, when required.

 

To find out how we can help, get in touch with us today and get access to your own money through invoice factoring.

 

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