CFOs must take measures to achieve financial resilience that withstands unforeseeable challenges. This will be the way to maintain the sustainability of businesses and survive in the turbulent economy.
Significant headwinds continue to challenge CFOs to manage businesses within tight budgets. The economic turbulence has compelled them to work more collaboratively with other C-suites. The basis of such collaboration is to respond to the immediate challenges and rethink and reshape businesses to recapture growth in the new normal.
As many organizations and CFOs have stabilized their businesses in a still-evolving landscape, the next step they need to focus on is building financial resilience. Forward-thinking CFOs are already considering building financial resilience as they find new business opportunities. That includes the expansion of supply chains, reimagining strategic movements, new automation techniques, and new capital deployment methodologies to equip all of these advancements into businesses.
An advanced financial environment will help organizations to achieve financial resilience that will enable businesses to survive the ongoing crisis.
Financial resilience will also help CFOs capitalize on future opportunities without any budget constraints.
Meanwhile, many organizations and CFOs are working hard on building financial resilience in several ways and different areas. The following elements of financial resiliency are essential to organizations’ success.
Reinforce Productivity
CFOs are seizing the increasing fintech opportunities to automate finance processes at scale. Adopting automation for business transactions, expanse management, invoicing, data entry, forecasting, and more, promises immediate value by reducing the risks, errors, and manual repetitions of tasks.
Automating these financial deeds and other areas offer substantial productivity gains. Organizations automating their financial operations gain real-time accounting and reporting, develop more advanced software to ease tasks, include analytics into data, and more. These advanced functionalities ensure high productivity, which delivers better business outcomes.
In addition to the productivity landscape, automation improves data quality for businesses, helping to enhance their decision-making process. CFOs today are encouraging finance to become more operational over merely managing the company’s finances. It is because financial information may contain only indicators for businesses to consider, but booming financial operations provide solutions to ease financial tasks and make businesses more resilient.
Creating Quick Business Continuity Plans with New Financial Governance
CFOs are prepping for multiple economic scenarios and building response measures for the future to help businesses stay financially resilient. This includes strategic approaches for financial risks, insurance risks, monitoring legal and governance policies, monitoring legal entities, and more that focus on stabilization. They are now keen on reviewing financial governance models in light of the current market position. For that, they need to ensure that the allotment of financial services is aligned with business requirements and that organizations are ready to adapt to new technology updates quickly.
The plans for new financial governance shall depend on the possibilities of new fintech approaches and unprecedented situations where businesses need less expenditure to build new financial platforms. This is one of the essential options CFOs should look forward to building their financial resiliency throughout the organization.
Strengthen Balance Sheet and Reallocate Capitals
The allocation of capital and strengthening balance sheets are essential strategic approaches toward building financial resilience. Many CFOs are adopting them to identify redundant products, services, or other redundant financial operations, freeing up capital to invest in other financial areas.
Reallocating capital capabilities with technologies including cloud, AI, and ML can help CFOs to re-plan and re-forecast easily with the changing market events. The ability to look at key elements of finance that could fit better and are essential for organizations, will boost resiliency. It also includes replacing spreadsheets with a centralized cloud-based tool so that every stakeholder can access the correct numbers every time the financial information is updated. This helps to maintain financial resiliency and paves the way for CFOs to invest in new capabilities that strengthen other business areas, including customer services, supply chain, customer loyalty, and employee success, which goes on to cover more.
Identify New Profits Opportunities
Organizations looking to be financially resilient should find ways to practice cost-effectiveness by looking for new ways of earning profits. New income opportunities such as investing in marketing technologies, collaborating with companies over similar product or service development, and installing new technological devices can quickly gain profits. By doing this, CFOs can find numerous ways to earn profits faster and re-invest them to upgrade businesses at scale. By taking smaller steps towards achieving profits, CFOs can quickly build robust financial resilience across organizations.
Also Read: How to Ensure Securing FinTech Applications—4 Best Practices to Follow
Have a Vision of Building Financial Resiliency?
To begin the financial resilience journey, CFOs must first consider a particular organization’s vision and strategic goals. The goals should be clearly articulated and shared throughout the organization, including stakeholders and C-suites.
While there is no standard formula, financially resilient organizations have unveiled business-focused visionary leadership and fostered employee-centric work cultures. Today, financial strategic planning and annual budgeting are a part of the everyday routine of CFOs because they need to keep reviewing all to understand and forecast the economic landscape.
By following this, CFOs can gain breakthrough ideas on better meeting consumer needs and effectively managing businesses by creating economic value. A well-established strategic financial resilience approach will help CFOs reshape businesses and recapture growth parameters.
The Next Steps for the Conscious CFO
The current economic turbulence has necessitated rapid action toward financial development for organizations. This has led CFOs to bring out-of-the-box innovation that helped them to rise above the challenges. CFOs seeking to build financial resilience should consider the abovementioned ways to boost growth. They will need to quickly transform their short-term reactions to long-term measures to create a brighter future.
