Finance Leaders Offer Data-Driven Analysis to Steer Business Performance and Sustainability Amid Uncertainty

Published October 27 2020
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The competitive advantage businesses need to remain proactive and agile during unprecedented times.

It's an understatement to say that current market conditions are rapidly changing, and uncertainty is high. The waters are troubled, and business leaders are coming together to help steer their ship through turbulence. The fast moving and unanticipated changes have required flexibility and weekly and sometimes daily analysis of the impact of these changes on financial statements. The current environment has:

  • affected how we work and engage with each other
  • impacted how companies sell and deliver products and services to customers
  • influenced corporate crisis planning and procedures
  • changed corporate strategies

During a finance leader’s career, it is inevitable that s/he will navigate financial volatility and uncertainly, but we are living in unprecedented times with immense economic uncertainty. Due to this recent uncertainty, finance leaders are making critical decisions to sustain their businesses through these difficult times. Leaders are evaluating the impact of changes in market conditions on the company’s ability to preserve cash, deliver to customers, make debt payments, and ultimately survive this difficult period. As a result, finance leaders are prioritizing short-, medium-, and long-term goals and evaluating the impact that key drivers have on their businesses.

In this moment, finance leaders are required to spend immense time analyzing and evaluating scenarios to provide critical insight that inform decisions with enormous and potentially long-term impacts on their organizations. These leaders are managing the company’s financial statements and liquidity by:

  • assessing their ability to deliver to their customer base
  • developing new products and services to better serve the market
  • evaluating operational efficiencies and synergies
  • considering mergers and acquisitions
  • restructuring debt

Consequently, having the tools to efficiently understand the impact of changes in market conditions to effectively communicate the impact and make critical decisions is imperative. The ability to model and analyze assumptions and strategies to assess the impact on cash flow, liquidity, the balance sheet, and P&L allows business leaders to make critical decisions more effectively while also providing visibility and transparency to answer critical questions. These tools allow finance leaders to understand the “why” behind results and provide the ability to change levers efficiently to proactively understand the impact of fast-moving variables. As the market stabilizes, companies will be faced with new critical decisions, including:

  • what to sell to their customers and how to deliver to them
  • staffing requirements
  • square footage needed for office space and sales floors
  • additional technology needed to support these changes

The key to achieving all this is a strategic financial plan to help decision makers run the businesses. Traditional management financial plans explain “what happened,” not “why” and “what should we do?” A strategic financial plan effectively links business strategy with operational levers to interpret the impact of today’s challenging business environment as well as the impact on the future.

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