The financial health of the company is indispensable for ensuring continued business operations during the crisis. This involves communicating with external stakeholders such as banks, regulators and shareholders as well as orchestrating collaboration within the company. Not only the core finance functions, such as treasury, controlling, accounting, and tax, need to work closely together. Ensuring liquidity and overall financial stability is a company-wide effort that needs to be orchestrated by finance. Besides managing liquidity and profitability, it is the finance functions' role to continuously provide transparency on the development of essential performance indicators. Now more than ever, fulfilling the business partner role by providing decision support in rapid steering cycles to management, is key.
Ensuring liquidity and setting up crisis performance management need to happen as soon as possible in the first phase of a crisis to "organize survival mode". The following levers are key:
Once this is accomplished, further measures to safeguard financial results should be taken in the second phase, "stabilize the business":
Last but not least, in the third phase, aligning steering instruments for a new path is the basis for "resetting the course". Therefore, steering instruments should be adjusted to potential business model changes and support scenario modeling for portfolio decisions. In the finance area there is also an opportunity to use momentum:
To help management navigate and cope with the crisis, three core elements are essential: