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Strategies for moving beyond the finance department

By Lori A. Sexton, CPA, CGMA, Senior Technical Manager — Management Accounting

Teleworking is becoming the new norm for many of us, and it may surprise you to learn that some CFOs have done this for years. There are remote and even part-time CFOs who manage and oversee all financial aspects of small- and mid-sized companies. We can get insight from these CFOs who have worked remotely for years.  

This global pandemiccoronavirus, requires many CFOs to move beyond the finance department and become involved in daily operations of the entire company. Decisions need to be made as new policies are developed and new processes are implemented. Many CFOs are informing these decisions and managing the logistics.  

Short-term and long-term cash flow is a primary focus. But financial analysisstrategic advisement and in-depth review of technology, banking relationships, daily operations, and employee policies and third-party collaboration are also important.  

If you are in a new role with new demands, here are tips:  

  • Maintain open lines of communication.

    Technology is the key to having real-time interactions with your team. Conduct meetings via video conference as much as possible. Discussing business via phone, email and instant messenger to foster professionalism with a personal touch while we all remain six feet apart. 

  • Review cash flow for possible adjustments. 

    Consider deferring discretionary expenditures. Depending on the size and type of your business, you could consider a 30- to 60-day hold on discretionary spending.  

    Consider asking vendors to extend their normal terms without penalty. Ask for an extension of more than 14 days 

    Consider offering your customers a discount for early or on-time payments 

    Now is a great time to look outwards and group A/P and A/R into separate buckets. This could reveal new means of addressing the cash flow. Perhaps local vendors and customers can provide a quicker turnaround than those across the country or the world.  

  • Review current contracts. 

    Talk with lending institutions about existing covenants and contracts. Examine the status of production/services and sales/revenue to then negotiate realistic payment terms. 

    You could also consider taking advances on existing lines of credit and federal funding as interest rates are lowered. Drawing on the existing credit line, and potentially federal funding, creates a cash reserve to meet operational costs, including payroll and supply chain management in the days and weeks to come.  

  • Consult benefits providers.  

    The companies that provide employee benefits will offer guidance on steps to take and information to disseminate to employees. They can answer frequently asked questions, such as: What are the penalty fees for withdrawing on retirement plans? Are there updated policies on sick leave and paid time off? 
     
    Information on all policies needs to be readily accessible to employees. Information can be mailed, emailed or shared in meetings, and it also needs to be stored online for quick access at the employees’ discretion. 

Considering the circumstances, we can learn a lot from strategies employed by CFOs who conduct rigorous oversight while working remotely. Here are more materials to support your efforts: