During a crisis, it’s not unusual for finance departments to take on the critical responsibility of managing cash pressures. Managing this type of change and difficulty can feel overwhelming. Here are four tips for finance departments to protect themselves during this challenging time:
- Conduct a serious review of all expenses.
Now that we have a two-month case study of what it’s like to operate a business in the midst of a global pandemic, it’s an opportunity review all costs and determine what, if any, can be either delayed or eliminated. Rethink how you will operate going forward. For example, now that you have worked remotely, how can this be leveraged in the future? Is as much travel needed? Is as much office space needed? All of these are legitimate questions that can aid in your organisation’s success going forward.
- Consider adopting an automation solution.
Even in today’s digital world, the core transactional processes within many finance departments still rely on employees performing manual tasks. Obviously, in situations where working from home isn’t possible, automated solutions are an attractive and viable option. As Michael Heric, Partner & Bain & Company put it in a recent Wall Street Journal article: “If you can’t send a bill to a customer or you can’t send a check to an employee, all of those operations basically halt. You’ll struggle to close the books if there’s a lot of manual things that are going on.”
- Work closely with customers and vendors.
When it comes to customers, be sure to get invoices out as quickly and accurately as possible. This is the most effective way to not give them any legitimate reason for delayed payment. It’s also a good idea to actively work on converting customers to electronic payment so you don’t have to rely on a physical check being printed/mailed. For vendors, depending on your cash position, check to see if they will accept longer payment terms or an early payment discount.
- Take advantage of government programs
In Asia, there are grants available for enterprises to leverage on for assistance depending on the country. The Singapore government encourages businesses to digitise and offers Enterprise Development Grant(EDG) to support your company’s usage of automation and technology or E-Invoicing Registration Grant (ERG) if you adopt e-invoicing through the Peppol network.
Additionally, in Malaysia, the Malaysian Investment Development Authority(MIDA) offers support to enterprises if you are looking to adopt digital programs.