Estimated Read Time: 7 minutes –

The finance organization’s strong, consistent leadership is critical for addressing immediate concerns about safety and survival, stabilizing the business in the short term, and positioning it for recovery.

Novel coronavirus has caused a global humanitarian and economic crisis. Large-scale quarantines, border closures, school closures, and physical distancing are unprecedented. Governments and communities are “flattening the curve.”

Organizations must act quickly to protect employees, customers, suppliers, and financial results. With some organizations losing 75% of their income in a quarter, cash isn’t just a sovereign – it’s for survival. As remote labor grows more common, digital connectivity is essential for corporate continuity. Business conditions, epidemiological forecasts, and norms of conduct change daily, if not hourly, thus frequent, open communication is crucial.

In uncertain times, the CFO can help stabilize the business and position it to succeed when conditions improve. The CFO contributes daily to a company’s financial health and organizational resiliency  Our expertise supporting customers through internal and external crises offers lessons for CFOs after the pandemic to put their companies on a stable financial foundation and eliminate fear and uncertainty. We  outlines here the important steps CFOs and finance organizations may take across three horizons: immediate safety and survival, near-term business stabilization in expectation of the next normal, and longer-term preparations for the company to make daring movements during recovery. 


Economically, COVID-19 is a liquidity and financial stress issue. As the coronavirus spread, thousands more businesses closed. Their supply chains are down. Fewer discretionary purchases can be made. As the crisis’s extent and duration are unknown, the finance leader must prioritize cash reserves. The CFO should examine the company’s liquidity, construct a centralized “cash war room,” develop various virus-spread scenarios, and roll out an internal and external communications plan.

Most CFOs are immediately calculating their companies’ cash on hand and additional capital. Finance leaders must forecast sales-related cash collections. Some organizations may need to double hard on collections due to late payments from clients. When working capital is insufficient, CFOs should access lines of credit and investigate other possibilities, such as divestitures or joint ventures. If required, companies should seek debt covenant relief early to strengthen the balance sheet before it’s an issue of survival. In times of crisis, when a cash shortage is likely and conditions change often, a cash war room can enable CFOs achieve significant budget cuts. CFOs can utilize a “spend control tower” and other tools to prioritize payments and track liquidity in real time.

Build Scenarios

Finance and strategy teams must rely on a range of scenarios rather than unique time-horizon frameworks. The finance chief should prepare two or three integrated scenarios that cover multiple eventualities, such as pandemic courses and which areas or industries will recover faster. The CFO should also set explicit financial action thresholds or trigger points. Financial planning and analysis (FP&A) works closely with business units and can project pandemic effects on demand and supply. Forecasts should include macroeconomic and company-specific data to detect EBITDA risk. The estimates should also include second-order implications including supply-chain disruption and staff displacement, as well as potential cash leakages and customer-liquidity projections.

The CFO should then create a structure that a small executive team may utilize to make business choices (to rationalize projects, for example) and monitor conditions (for triggers that might cause various scenarios to unfold, for instance). The CFO must monitor in real time how cash decisions affect the company’s ability to weather the slump and resume operations when demand recovers.

Plan Communications

Financial and strategic crisis management are the CFO’s responsibility. The company’s key financial emphasis during this era will be developing a “cash culture,” or preserving and deploying capital dynamically. The CFO must convey this priority throughout the organization and help build incentives to reinforce it so all departments and business units understand “why this matters now” and their role in optimizing cash.

Proactively communicating with boards and investors is crucial. The message should focus on the crisis’ real and predicted consequences on the company, actions taken to protect the business, liquidity, and modifications to earlier earnings commitments. After a few months of instability, the CFO should expand investor communications, especially when new information is available. Such connections show that executives are acting quickly and decisively based on their best understanding.


Once liquidity worries are handled, the CFO must guarantee the organization is ready for the next normal. The finance chief must increase operational efficiency, reevaluate the investment portfolio, and invest in the finance function’s capabilities.

Boost Productivity

During the past economic crisis, a tiny group of leading companies (we call them “resilients”) pursued productivity increases more often than others, creating growth capacity during recovery.

They outpaced opponents, doubling TRS production over the next decade. Resilient organizations decreased operational costs three times as much as peers and did so 12 to 24 months earlier.

The CFO and finance team can make various operational changes to boost performance. To boost sales, the CFO might promote new products and services that help clients with financial problems, encouraging customer loyalty. The CFO can reallocate resources to businesses with robust revenue streams and improve e-commerce use.

With most of the world in lockdown and demand declining, finance chiefs must take fast action to reduce operating costs. However, CFOs must also maintain flexibility to grow operations back up as the economy improves. In the meanwhile, the CFO and finance team can implement rapid zero-based planning for discretionary expenses like indirect procurement.

Re-evaluate Investments, Enhance Balance Sheet

CFOs should exploit this crisis to undertake a deep balance sheet diagnostic, such as assessing goodwill impairments, refinancing debt, and decreasing inventory, accounts-payable, and accounts-receivable terms. This balance-sheet cleansing can extend the company’s financial flexibility and keep everyone focused on essential indicators. CFOs should lead a review of significant R&D, IT, and capital allocations and optimize the company’s investment portfolio. Pandemic likely affected business units’ initial estimated returns on investments. Finance leaders must quickly move people and financial resources to higher-yielding projects and strategic initiatives.

Boost Financial Planning and Analysis

Under crisis conditions, the FP&A staff must speed budgeting and forecasting, providing updated business information to the CFO and finance organization. In a crisis, data latency concerns cannot be tolerated by the FP&A team. The team’s updates must create a true rolling forecast, accompanied by a “decision cockpit”—a real-time dashboard business leaders may use to focus on seven to ten key metrics for the future months.

Some financial firms may lack the executives with analytics and business experience to boost the FP&A team. The CFO must recruit innovative, proactive personnel, recognize their performance, and support their experiments with new responsibilities and roles. With unexpected and dramatic unemployment rates in many sectors (such as hospitality and travel), financial businesses may be able to acquire top individuals with digital, finance, and business knowledge that had been hard to obtain.


Senior management will want to move on after the crisis passes. The CFO and peer executives should organize a small group of competent executives to work on strategic planning, with oversight and support from senior management and the board. The team will prepare investments, portfolio modifications, and key productivity efforts to help the organization win after the epidemic.

Five main steps effect a company’s ability to significantly exceed the market: dynamic resource reallocation, programmatic M&A, strong capital spending, productivity breakthroughs, and distinctiveness improvement. Reallocating resources for future growth, realigning the portfolio through acquisitions and divestitures, and enhancing productivity are particularly vital in the current crisis.

Reallocate Resources Through Transformational Thinking

Crises are typically good occasions to restructure corporate areas that need change (and to take the related charges). Not this one. When setting goals, managing performance, developing budgets, or confronting the business on growth or expense actions, the CFO and finance department should have a transformation attitude. Finance should assess the portfolio to maximize each business unit’s potential. Now is the moment to ditch incremental thinking and seek transformative strategies that can grow sales or cut costs by 30 to 40%.

Boost Portfolio Through M&A and Divestitures

Unstable markets and falling valuations can spur M&A. CFOs should determine how to use M&A to control the crisis (via divestitures) and reallocate cash to high-priority priorities (through product, geography, or supply-chain acquisitions, for instance). A programmed strategy to M&A, where corporations pursue regular small and medium-size acquisitions, may be promising. During the recent financial crisis, companies with a programmatic M&A approach outperformed and maintained TRS. Top-performing companies throughout the downturn (those with top-quartile TRS) had the largest average yearly transaction volume and returned six times the bottom-quartile performance. Resilient corporations sold 1.5 times more assets than their counterparts.

Aim for Higher Productivity Through Digitization

This is the first economic disruption that demands a major part of the global workforce to operate remotely, necessitating digital-collaboration tools. The financial team’s use of digitization to address the problem isn’t a one-time occurrence. Automated closings and real-time forecasts are becoming commercial necessities. The CFO and finance team should advocate for digitization after the crisis has passed. The CFO and finance team may codify and scale solutions like the cash war room, rolling forecasts, and collaborative dashboards. Actively embracing digitization will ensure accurate reporting, informed decision making, and business continuity in future crises.

Massive supply chain disruptions have also drawn notice. These disturbances shifted company leaders’ ROI calculations from efficiency to resilience and stability overnight. Consider how global BPO centers are hurting from lockdowns and constrained bandwidth in their own nations (India and the Philippines), and how many vital procedures they support have been affected. CFOs must digitize and automate fundamental business activities to decrease exogenous shocks and build resilience.

While employees worry about their health, future, and loved ones, finance leaders must show empathy and bounded optimism that the firm and its people will survive.

The CFO can support this view with actions and choices. The CFO must communicate “probabilities” and the “unforeseen” often. This will reduce doubts, reduce distractions, and boost motivation. Empowering people in the finance organization to direct crisis response and building a financial decision-making framework are also crucial.

Despite not knowing how long the pandemic will last, our business and daily lives will eventually return to normal. CFOs are important to ensuring their firms survive and grow after the crisis.

Credo’s CFO services center on addressing the difficulties that CFOs confront in the present day. To assist your financial function meet or even surpass the expectations of all stakeholders, cross-discipline solutions are required. We provide comprehensive services to satisfy the business goals of your firm while strictly following to regulatory and professional standards. We integrate consulting, corporate finance, financial advisory, assurance, and tax skills efficiently.

Credo CFO Services span from the establishment of the functional plan for the finance department to the full deployment of the supporting systems. We offer a full array of CFO services to assist CFOs in their unique role as integrators of corporate governance, operations, performance management, and business strategy. All parts of the finance department are covered by the strategy, diagnostics, design, and implementation services provided by Credo CFO.