By Nicky Tozer, VP EMEA, Oracle NetSuite

After several months of interruption, businesses around the UK are slowly getting back to work – with lockdown measures easing and guidance being put into place on how workplaces can function in a socially distant world. The finance department’s role in this process – getting companies back on their feet and keeping them there – requires a proactive and adaptable approach in the short-term, while always keeping an eye on the long term.

As the government continues to develop its plans to reopen the economy, finance leaders have a pivotal and highly strategic role to play in guiding their organisations. By bringing forward insights on how the business can generate and retain cash and remain flexible from an operational standpoint, the finance department can lead the charge in returning to growth.

Here are the three actions finance leaders must do to take back control.

1. Cash continues to be king in the ‘new reality’

As COVID-19 interruption began, finance leaders were understandably focused on cash – taking stock of the resources in reserve, outstanding receivables and pending liabilities, then making estimates of how much cash the business will need to maintain operations.

These actions are still crucial. But there has also been a shift towards reforecasting, and identifying pockets of budget that can sustain, adapt or expand operations, as the economy looks to what is next. Most finance teams operate on a 12-month budget cycle and manage strategic plans with longer timeframes. Now, the focus must shift from long-term to immediate priorities, particularly as sectors such as retail and hospitality begin to reopen.

Using a shorter window allows a business to plan immediate actions, whether relating to payroll, cutting costs, or maintaining liquidity. According to a recent Gartner CFO study, 58% of CFOs have cancelled conference spending and 51% have frozen travel and expenses, freeing up cash reserves for maintenance or experimentation.

For example, finance leaders can actively reallocate resources to business lines with strong existing revenue streams and optimise the company’s use of alternative, innovative sales and delivery channels, such as direct-to-consumer and e-commerce, which have hit a 10 year high. And they can also help remodel recurring revenue for continued cash flow. Subscription or license-based offerings will be more appealing to customers and prospects than large, one-off costs.The current environment also presents a chance to work on profitability. Efficiency and targets are key. During periods of growth, some level of inefficiency is tolerable, but when companies need to contain costs, it simply isn’t an option. Finance leaders must eliminate inefficiencies by redesigning sloppy processes and automating manual tasks that can continually improve cash flow.

2. Dial up financial planning and insight analysis

Forecasting was hard enough before this new reality. Right now, finance leaders must build out a handful of scenarios that are grounded in reality and assume a wide range of outcomes. Every organisation must relook at its forecast for sales, expenses and cash flow and retest its assumptions. These scenarios should include modeling cash flow, burn rate and liquidity under multiple scenarios.

This planning needs to be organisation-wide. Reporting and analytics are core to the planning process and can provide one integrated, company-wide plan. Once cash flow is under control, and budgeting is being carried out in real time, CFOs must accelerate forecasting work, using continually updated business information to strategically plan for every eventuality. Crucial here will be implementing collaborative tools to monitor and manage Key Performance Indicators (KPIs).

Real-time analytics enable finance leaders to make fast decisions. It is about producing actionable insights built on historical trends, current conditions and likely scenarios so decision-makers can forecast what will happen next. Insights, analytics and scenario management enable finance leaders to evolve balance sheets into dynamic cash flow plans, revenue forecasts, headcount analysis, budgets, and expense plans.

3. Change the culture in the finance team

With cash flow and planning in order, a cultural shift is needed to embrace remote working as the norm. Home working has provided a lifeline to keep operations running but provides its own challenges and opportunities, and we are already setting the tone for how remote working will look for years to come.

A major part of this challenge will be creating and sustaining high-performing virtual teams in an environment that supports the business. Beyond the obvious technological challenges of ensuring teams have access to the right information and systems to do their jobs, finance leaders must be prepared to evolve their management abilities.

Where cash flow is concerned, finance leaders must instill a task-based culture for finance teams to navigate daily and weekly changes that may affect operations. When cash is king, there is no margin for interpretation on the data that must be accurate and real time.

When managed well, virtualising how and where people work could lead to improvements in productivity, as well as increased engagement. Finance leaders need to focus on removing the blockers that will enable them to put their best talent into helping solve their biggest issues, such as identifying opportunities for recurring revenue. Barriers might include having to manually chase late payments – a time-consuming process that can easily be automated.

Communication is also vital when removed from the bubble of the office environment, and finance leaders should expect to spend more time proactively delivering guidance and context to their teams. Understanding finance’s strategic role to the current and future success of the business is key, and finance leaders need to firmly deliver that message to instil the sense of importance in the tasks at hand.

As we slowly move towards dealing with the new reality, businesses are beginning to rebuild and thrive again. This change has created a moment for innovation and opportunity with businesses identifying new skillsets, business models, and even new industries. Being able to evolve quickly and make fast, well-informed decisions will be key, and finance leaders and their teams will be at the heart of those strategic moves. And in the process, the finance function can create value and elevate its role as a business partner for the long term.