Financial Planning in Times of COVID-19

The immediate response of companies to the COVID-19 crisis has been the adoption of measure to preserve liquidity, such as cutting non-essential expenses, renegotiating contracts, terms and debts and, where possible, taking new lines of credit.

We are now entering a second phase, where companies are adapting to a gradual reopening of markets that will lead them to a ‘new normal’ that is still unknown.

In this scenario of extreme uncertainty, the financial planning process has an essential role since many other decisions depend on it, which in turn impact cash flow. In analogy to the treatment of the new corona-virus, if liquidity management is the respirator that keeps patients alive, then the strive for operational efficiency is what makes them leave the ICU.

For this, it is essential to reestablish medium-term planning, the so-called sales & operations forecast (S&OP). Under extreme uncertainty, as in the COVID-19 crisis, traditional methods reach their limits, but we can list here 5 elements to be adopted to direct the recovery in the market with operational efficiency: outside-in focus, risk management, surgical detailing, reduction of complexity and agile planning. We will be promoting in colaboration with Staufen.Táktica  a free webinar on the subject on May 20 at 10:00 am (BRT). Guarantee your place here.

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