Marcus Wagner, AcctTwo’s Founder & CEO, discusses the harsh reality of doing business during the COVID-19 pandemic on Financial Executives International’s (FEI) website. The role and expectations of CFOs and finance teams is changing as they face immeasurable challenges and make tough decisions. “The COVID-19 pandemic and its associated economic impact brought a wave of unforeseen challenges to company financial leaders, forcing many to make difficult and strategic decisions in order to remain in operation as businesses around them shuttered.”
Challenges CFOs are Facing
Drop in revenue because of the forced closures
- Pushed to look for additional sources of funding
- Need to completely reforecast the rest of 2020 – “Finance leaders were formulating 10-20 models in the first two months of the pandemic – an activity that usually only happens an on annual or quarterly basis.”
- Making quick cost reductions to preserve cash flows
- Choosing to take on substantial debt or making rigorous cost-cutting measures – “Some suffered from a death by a thousand (business) cuts, meaning that instead of cutting once and cutting deep, they did a series of cuts over time.”
- Trying to strike the right balance of telling the truth about business uncertainty while also maintaining optimism
“The most successful companies were the ones who cut early, cut deeply and cut once. These businesses started out by evaluating low performers – the bottom 10% of people that are not performing to company standard and don’t have the potential to help the business post-pandemic.”
Finance Digital Transformation
COVID-19 has taught finance professionals that embracing the technological changes brought on by what many are calling the “digital transformation” of the past 20 years is a key to survival. A common denominator in the businesses that are surviving and possibly thriving is the ability to adapt quickly. Having an advanced financial software platform that is cloud-based is a key element to being able to have the right information to inform challenging business decisions.
Taking Finance Digital Transformation to the Next-Level with Outsourcing
Business managers should continue to seek further opportunities for digital transformation, including outsourcing certain non-core functions. Outsourcing can help businesses with proactive planning and more:
- Provide higher quality outcomes, like more real-time and more granular data
- Focus their attention on more strategic activities
- Curate, integrate and optimize all the needed technologies
At the end of the day (or pandemic), you should seek accounting outsourcing services from providers who specialize in their industry and are experts in both finance and accounting, as well as technology.
About Financial Executives International
Financial Executives International (FEI) connects senior-level financial executives by defining the profession, exchanging ideas about best practices, educating members and others and working with the government to improve the general economy.