THE CFO : Keystone of the recovery with the data management

The economic analysis institute Rexecode carried out a study at the end of April on the population of TWAs and large companies. It found that the vast majority of them had managed to preserve their liquidity thanks to the banks’ willingness to be accommodating to their long-standing partners by agreeing to extend their maturities. The CFO is now the key to recovery for businesses.

The economic environment of Medium-Size Companies at the time of recovery

Companies that had good relations with their banks did not encounter any particular difficulties in securing their cash flow, but it must nevertheless remain a subject of vigilance for the months to come.

The construction of a dashboard updated at least twice a week should allow to follow the evolution of orders and the increase in resources. This dashboard offers better visibility on the evolution of the order book and should allow a satisfactory adaptation of the return of staff placed on short-time working during the crisis. It should also help to create a forecast that will enable shareholders to anticipate the end of the crisis by determining whether the drop in productivity is more likely to be in the form of an X or Y.

Some companies estimate that it will take a year for their business to return to pre-crisis levels, but more time may be needed. Large companies are cautious about the future, as demand and its possible fluctuations in this uncertain environment are still unknown. Business will have to be managed on a day-to-day basis until stocks have been cleaned up and business development has resumed around the world.

The priority for the CFO in many companies is to reopen their factories, agencies or stores. Even if e-commerce has increased during containment, it has not compensated for the loss of turnover in stores. In addition, stores have to spend money on sanitary equipment and supplies to protect employees and customers.

Another difficulty of the recovery lies in the ignorance of companies of the rate of frequentation of their sites and the behaviour of their customers. All of them are forecasting a decline in turnover until the end of this calendar year. It is therefore important that they effectively adjust both their workforce and their purchases of goods in line with visitor numbers and consumption rates.

Some of them, in order to keep control over their turnover in relation to their indicators and the number of people needed to produce these quantities in parallel, adapt their opening hours to the margin.

Some of them, in order to keep control over their turnover in relation to their indicators and the number of people needed to produce these quantities in parallel, adapt their opening hours to the margin.

The Covid-19 crisis has altered the stock logic that previously prevailed. From now on, replenishments are carried out in a much more flexible way, according to the needs.

While the current situation requires exemplary responsiveness on the part of companies, they should not act in an excessively urgent manner if they wish to preserve their balance, as it is easy to destroy and difficult to deconstruct. This truth is all the more true in the case of companies with skilled labour, which is becoming scarce.

It is therefore in the interest of companies to be cautious in their management of the recovery and to anticipate the conditions under which they will once again have visibility and a more consistent level of activity.

Crisis-induced digitization of financial processes

In this context of uncertainty, the management of budgets and financial analyses in their planning and estimation aspects seems to remain a priority for the CFO.

As for monitoring and optimizing cash flow, the CFO in many companies should appreciate them even more than before.

Employees of companies that did not have automated reporting tools for accounting elements were obliged to go on site during the confinement period in order to get the information they were missing.

Those who were not forced to do so had to scour computer networks to find the information they needed. These failures or complications demonstrated the need to simplify the tools, but also to work on the granularity aspect of the systems.

Furthermore, the foreseeable persistence of teleworking for the coming months or weeks calls for the digitization of incoming and outgoing invoices. This digitization and the recasting of data will also prove appreciable if employees are once again physically unable to access sites and mail.

On the other hand, some companies have been able to manage their account closures remotely with the auditors, and allow their customers to pay their invoices through payment links sent by e-mail.

The Covid-19 crisis revealed to the CFO that simplifying the tools would have enabled better optimization of financial processes.