Keeping cash flowing in any organization starts in the finance function. A balance of short and long-term planning can greatly impact how your company manages and comes out on the other side of these uncertain economic times. Read how we think finance can lead the charge and garner support from around the business for a more empowered future.
It’s time for finance to step up
Now more than ever, finance teams have a chance to make a substantial impact on the overall success of their company’s stability and sustainability exiting the COVID-19 pandemic. While finance departments have come a long way in proving their value to other business units, the demand to provide more decisive support during a time of crisis is imperative, as the priorities of a CFO are now the same priorities of the entire organization.
An article released by leading consulting firm, Bain & Company, states that “COVID-19 will demand not only that finance teams devote more time to value-added activities, but also that traditional activities, such as receivables and payables, run more efficiently and effectively, through remote collaboration and other new ways of working.” In other words, it’s time for finance to raise their hand and express strategic drive.
Just reacting isn’t enough
Reacting and reporting on the impacts to your business is no longer enough. Finance organizations need to become more vocal to ensure that the business understands the financial impacts taking place and provide forecasts on where they think the future is. Financial impacts during times like these can include the loss of a key supplier or reductions in customer spend. Without clear communication between business units, the severity of impact may not be understood, leaving some to question company preparedness. Here are a few areas of focus to empower this shift in leadership:
Encourage the business to emphasize cash flow and take control of spend data – both upstream and downstream
Use your own data and what it is telling you by applying analytic thought and tactics to derive insight
Define what metrics really matter through these challenging times (ex. new orders, weekly financial performance)
Control money coming in and out of the building: (see Bain & Company’s cash flow image below)
Recognize your critical suppliers and consider acceleration of payment terms to keep them delivering
Finally, be consistent. Once you begin to support smarter business decisions, maintain your drive and visibility.
A company’s confidence and ultimately, its resilience, is shown through demonstrating how prepared the company is to continue production/operations, setting realistic expectations, providing regular updates on cash flow management, and having contingencies if the company does not meet its targets.
How can Basware help?
One way to activate a contingency plan that reduces administrative tasks and improves efficiencies, is through AP automation. If you’re still relying on paper invoices while your workforce is working remotely, you’re likely seeing major disruptions in fulfilling payment to your suppliers.
In addition to slow payment cycles, visibility of what’s been paid, what’s currently due, and what’s upcoming, may prove to be unmanageable. By receiving invoices electronically, or e-invoicing, your company benefits from full visibility into its financial data and your company’s liquidity – resulting in improved agility to today’s changing office environment.
Ready to learn more?
Dig deeper into how AP Automation can help keep commerce moving in tumultuous times by downloading our eBook. Learn how AP Automation simplifies processes, provides clear visibility, and further develops in-depth analytics and cash flow optimization.