The FP&A Trends Webinar: Mastering Analytical Transformation with FP&A Trends Maturity Model
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The FP&A Trends Webinar: Mastering Analytical Transformation with FP&A Trends Maturity Model
Click here to view details and register
By Harish Maheshwari, Finance and Strategy Manager at Texas Instruments
“When the going gets tough, the tough get going” – this is the mantra that CFOs, FP&A and finance leaders are adopting to safeguard the business while anticipating business trends, quickly addressing volatility, strategically positioning assets, and proactively establishing long-term financial and operational viability across the business in the midst of COVID-19.
Analysts are predicting that we are in a mild U / V / W-curve recovery for the economy with a possibility of re-occurrence of the virus that could lead to a vulnerability in the economy.
Considering the current pandemic situation, I am sharing a baseline financial framework to establish the organization’s longterm financial and operational resilience:
1. Liquidity Bolstering: examine the current cash flow condition and manage working capital through liquidity cycle.
2. Cost Controlling: curtain discretionary expenses to improve the cash position.
3. Debt Restructuring: revisit current debt arrangements considering whether there might be potential breaches of financial covenants and determine a short-term debt management plan.
4. Business and Finance Continuity: reshape strategy for business and finance continuity.
5. Stakeholder Management: embed stakeholder considerations in the company’s decision-making process.
6. Organic and inorganic growth investment: reexamine the corporate-growth strategy.
7. Talent Leadership: support people in difficult times.
8. Operational Resiliency: assess the impact of potential supply delays and guarantee operational strength.
9. Agile Forecasting: streamline the robust forecasting using stress tests.
10. Strategic communication: address transparent and regular communication with the stakeholders.
Conclusion:
It’s hard to predict how long the pandemic impact will last but after a while business and daily life will find a new equilibrium. As the SWOT analysis tells us, there are not only threats but also opportunities. Finance leaders need to ensure a strong balance sheet with cash reserves to innovate, outdistance their competitors, and grow more quickly to transform challenging times into opportunities.
In conclusion, I quote Sam Cawthorn who once mentioned that “crisis moments create opportunity. Problems and crises ignite our greatest creativity and thought leadership as it forces us to focus on things outside the norm”.
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