A large number of companies have suffered a negative impact on their finances , due to the crisis caused by COVID-19. Those who have not yet noticed its effects are adapting and preparing so that this foreseeable impact causes the least possible damage. Those plans proposed before confinement will be maintained, although adapted to the ‘next normal’ to ensure, among other points, the liquidity of the companies.
And, meanwhile, all organizations will have to face a meticulous planning process, using the necessary tools , to guarantee that liquidity , a reduction in their costs and the strengthening of their commercial relationships, together with the identification of opportunities in the new normality to consolidate its position in the markets, at this time unstable.
The axes of medium-term planning
The planning that every financial management department must address will have to be very detailed and cannot focus solely on the liquidity of the companies. It has to consider several backbone pillars and more than one factor, which are interrelated with the good financial and accounting health of the entire organization. These could be:
The recovery of liquidity
The improvement of cost efficiency, on a day-to-day basis
The reactivation of income
Comprehensive reorganization adapted to the new work environment
- The search and exploitation of new market niches
Financial management must focus on following this “roadmap” while aligning all actions with a strategy aimed at restoring normalcy, without opening an unrecoverable waterway in the year corresponding to 2020.
Recommendations beyond the liquidity of companies
Talentia Software recommends financial managers, regardless of the casuistry required by each particular organization, to rely on technology to benefit from a very similar analysis and behavior dynamics, applicable in practically all the ‘next normal’ scenarios of companies ”.
The first unavoidable step is to make a diagnosis of what are the damages caused by COVID-19, where they are located and what is their level of importance. It is also very necessary to acquire an overview, to check what position in the market the organization occupies and what is its real competitive muscle.
Another aspect to review is, without a doubt, the range of technological skills. Above all, in relation to the distribution and use of human resources and the capacity of the corporation to adapt or reinforce policies aimed at teleworking. How the assets of human capital are distributed and the best way to optimize or strengthen this area is essential.
In addition to all this, with the real data of the situation in hand, it is advisable to develop a continuity plan. This must take into account the fundamental pillars mentioned above – efficiency, income, liquidity, people management and new opportunities -. Having identified the opportunities that the ‘next normal’ entails for the organization, either in the focus of the activity or in the exploitation of new markets, it is totally unavoidable to completely redefine all the strategies in a transversal manner.
