It’s no secret that the world is navigating unprecedented uncertainty right now, with no clear end in sight. The ripple effects over the last few weeks have upended the economy, forcing companies around the globe to shift strategies, explore alternative business models and make on-the-spot operational changes.
For finance leaders in particular, this presents a tremendous challenge. As strategic partners to the business whose insights help influence key decisions, how can finance pros help their organizations weather the storm, while also planning for sustained growth?
The answer to that question is multifaceted and will vary between companies depending on size, structure and industry. But one key principle rings true—every organization needs to have a business continuity plan (BCP), or at least be prepared to develop one quickly.
BCPs in Finance
Business continuity plans involve policies and procedures that keep the company running during transformational periods, or in the wake of a major disruption. For finance leaders, aspects of continuity planning can include re-aligning capital investments, taking on some debt, or ensuring there’s enough cash on hand to cover any unforeseen expenses. As resident experts on the drivers of revenue and growth in an organization, finance leaders know better than anyone how to keep their companies in the black.
Efficient and Agile Planning
But finance pros can’t plan effectively without clear and up-to-date insights into long-term business implications, which is why rolling forecasts are so important to maintain. Unlike static annual budgets, rolling forecasts are based on real-time financial data and typically look ahead at least five quarters beyond the original budgeted period.
With rolling forecasts, finance pros have the flexibility to change their plans quickly for easy analysis of how new budgetary assumptions would affect the company’s outlook for the next two to three years or more. That level of foresight enables leaders to confidently chart the best path forward through uncertain times—and sleep soundly knowing their decisions are based on reliable, actionable data.
Perhaps even more important during times of uncertainty is fast and efficient integrated planning—which means aligning every business function toward the same strategic goal. After all, finance leaders can’t be expected to take the helm of a company’s continuity planning process without support from the entire crew, especially during periods of change. In order to foster transparency, accountability and collaboration while still prioritizing efficiency, finance leaders need to ensure that:
- They have a single source of truth for all financial and non-financial company data.
- All internal stakeholders have visibility into the planning process and the means to actively participate.
All of this is much easier said than done, even for the most savvy finance leaders out there. At the end of the day, an effective integrated planning process requires an agile analysis of critical metrics and the ability to consolidate data from multiple sources for fluent, more accurate reporting. If finance teams are bogged down with manual Excel processes and locked into static annual budgets, they’ll have a much harder time responding quickly to adverse conditions that require more forward-thinking analysis.
With a clear plan, the proper tools and the right resources at their disposal, finance leaders won’t have to fear periods of uncertainty. Instead, they’ll be able to approach every situation with confidence and develop a data-driven game plan—ultimately aligning the entire company on strategy and leading the charge toward updated targets and goals.