In this blog, KES would like to share with you a recent article posted to the NetSuite Blog, ‘How CFO’s Are Managing Cash Flow, Planning and Forecasting as the Economy Reopens’. The article and video content below was originally published by NetSuite and was written by Kendall Fisher, Executive Producer and Host of The NetSuite Podcast on May 15, 2020.
As the economy starts to reopen, one of the most critical steps businesses must take is an acute assessment of their finances.
More than ever, they need to take tighter control over cash flow, diving into metrics to really understand where the business stands and then prepare accordingly. Is the company profitable? Is there enough runway to cushion what’s still an unpredictable future, and what sort of scenarios may impact that runway?
Of course, forecasting under normal circumstances is difficult–making it all the more challenging in today’s climate. But it’s now imperative to do so weekly or even daily in order to better prepare for a wide range of possible outcomes.
NetSuite sat down with CFOs from four organizations across various industries to discuss the impact of COVID-19 on their businesses and their approach to assessing their finances, seeking additional funding, scenario planning and forecasting, as well as the tools and data they’re using to make those predictions.
Watch the video to hear what they had to say.
Here is a full transcription of the video:
Our core business is focused on the preventative surgeries. So as the preventative surgeries have been delayed, we have seen a decrease in our revenue.
We are continuing to operate almost at full capacity right now. We have, of course, seen a slow down in shipments leaving our plant, so that’s certainly put a big cramp on us from a cashflow point of view.
Some of the things that we’re seeing is kind of a pull back in spend to the tune of maybe 20 to 30%.
We’ve had a little bit of a lull in sales, but we expect that to recover. We have spent a lot of time really looking at some of the opportunities through the CARES Act. That’s been real important to us because, like I said, we wanted to keep the doors open and I think that’s been a big help to us in being able to do that and keep people employed full time.
We were very fortunate. We applied for the PPP, Paycheck Protection Program, very early on and we were able to retain a hundred percent of our workforce. Very proud of that.
We continue to have a very flexible approach to what we do for analyzing our business and our budgeting. We do very frequent bottoms up analytics of our sales forecast. So we’ve continued to do that before, during, and looking forward to the after of this situation.
Daily. We’re in close communication with all of our providers and understanding when they’re coming back online, what they expect, what they have as far as surgeries scheduled in the near, short, and longterm future and forecasting according to that.
We’re doing the same type of forecasting scenarios that we’ve had because we’ve had some really strong processes in place, cross-functionally. When you have a cross-functional view on your business planning, you’re putting all the best minds in your company together, and then you’re able to have the most realistic view on what’s to come in the future.
What we see are key indicators that there will be an uptick. And that’s really reflected in both our backlog of booked business plus projections we have from our primary customers.
We’re really looking at all the what-ifs, all the things that we said, “Eh, that’ll never happen. Not too worried about it.” Our EHS, our HR teams, and our senior leadership are really focusing on all those things that we thought were unimaginable before.
If the demand for our particular products continues to be where it’s at, then you’ve got to think about how do you deal with inflation.
From the CFO perspective, it’s just a matter of navigating each path, so to speak, and making the best decisions that we can as an organization.
The world’s a really unsure place right now. So we don’t know everything that’s going to happen. We all just need to be prepared to shift, be flexible, be adaptable to whatever the new world brings for us.
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