Being a Business Controller in turbulent times
The world is undergoing one of the most critical and overwhelming moments in decades. The global pandemic caused by the covid-19 has tragically cost the lives of many people. Also, the global economy is impacted in a way that we’ve never seen before. Measures installed by governments across the world, such as closed borders, country-wide quarantines and closed schools are seriously impacting businesses, with consequences such as loss of demand (e.g., hotels, airlines, restaurants) or supply (e.g., medical material, food and beverage).
Considering the current situation, businesses across all sectors will in some way be impacted by the global crisis. Financial resilience will be the single most important thing for businesses to get through the challenging times ahead.
As a Business Controller, this is a critical moment to step up more than ever before. They can truly be critical components of companies’ future success in this global crisis. The Business Control function and responsibilities will vary depending on the situation in which the business finds itself, but there are a few critical steps Business Controllers will need to take in order to prepare for various outcomes.
1. Adjust forecasts and use scenario management
Nobody has the right and definitive answer on how this situation will develop – not governments, health experts or economists. The only tools that we have at hand right now are our best estimates, based on various scenarios. Most businesses will need to oversee their previous estimates and make changes. Forecasting changes can be done to most parts of your business, including demand, cashflow, supply, etc. It is vital to use scenario management in order to plot out various outcomes – the best, worst, and most probable scenarios. Thereafter, create subsequent action plans in order to be prepared for what might come. Luckily, today there is access to advanced forecasting tools, which makes forecasting easier and more accurate.
2. Cost control
This is an immediate and critical measure. Most companies will need to overlook their costs at this moment in time. As income streams will be affected, it is crucial to oversee and scrutinize the budgeted costs to minimize the impact on the bottom line.
3. Manage short, mid and long-term financing
In order to stay financially resilient, it is critical to manage the short, mid and long-term financing for the company is in place. When business activity slows down (or for some industries, up), it is crucial to get the appropriate funding in place to get through the most challenging times.
4. Monitor new regulations
In the past couple of days, governments across the world have announced financial measures for companies in order to mitigate the economic impact on businesses. Keep a close look at the different financial regulations that will be put in place, as they might help many businesses survive the most critical phase of this pandemic.
These are just a few of the many measures that businesses must take at this stage. Please contact us for any questions on how we can help your company get through these turbulent times.