Life after COVID-19: CFOs Prepare for Return to Business

Profits in almost every conceivable industry sector has taken a pounding during the coronavirus pandemic. Nina Hendy examines how CFOs are preparing to get back to business.

Heavy-hearted CFOs have been scrambling to mitigate the fall-out from the global COVID-19 pandemic in the past few months.

In both Australia and New Zealand, the economic damage has been unparalleled.

Australia has suffered a $4 billion reduction in economic activity every week the lockdown restrictions remain in place, Federal Treasurer Josh Frydenberg has revealed.

Both governments have responded with generous stimulus packages.

An initial $12.1 billion COVID-19 response package was announced by New Zealand Prime Minister Jacinda Arden in March to protect the health and wellbeing of Kiwis.

So too, CFOs have been quietly plotting a raft of measures or pivot mammoth companies to stem extraordinary financial losses that have been unparalleled during any other global financial crises.

A Deloitte Access Economics Budget Monitor released this week describes the economic recovery as a marathon. COVID-19 has dealt body blows the business confidence, income and wealth, which has resulted in many businesses being more cautious about taking risks, it reveals.

The Financial Pandemic

But as lockdown restrictions ease and employees prepare to return to offices, CFOs are contemplating what a return to normality might look like for their business.

From home offices, finance leaders have spent weeks exploring ways to stem the financial carnage.

Many are cultivating the first green shoots of a return to normality with a sense of optimism. Despite the fact that financial forecasting when there’s so much economic uncertainty is extremely challenging.

Businesses across a range of industry sectors are allowed to tentatively and slowly return to work, albeit under strict social distancing measures.

Navigating the Storm

With nearly a million Australians out of a job due to the pandemic, there aren’t many industry sectors hit harder that recruitment and human resources.

Trent McMahon is the CFO of recruitment and human resources business, Davidson, which faced the immediate challenge of having all current business plans paused.

Despite this, he has managed to retain staff and work on plans to further support clients as they begin to bring workforces back into offices.

Over the coming quarter, McMahon will finalise a plan for a raft of changes to the business.

“We have a number of initiates. For example, we have a program of work that is examining every aspect of our business and we’ll make structural changes to align to where we think the market is headed,” McMahon says.

“Steps have been taken to ensure ‘cash flow first’ principles have been strictly managed and we implemented strong stakeholder engagement,” McMahon says.

Technology and software business, Smarter City Solutions was also hard hit by the pandemic.

CFO Kathleen Roth says the business, which supplies technology and software to towns, councils and universities, is considering what areas of the business to reinstate, and when.

She advises CFOs to construct a productivity model to ensure you are balancing employees with revenue and workload.

“Look at staging the return of your workforce in small groups to support staff as they adjust to being back in the office and a traditional workday structure,”

CFO, Kathleen Roth

“I would also re-evaluate the Return on Investment of every department and every employee to ensure you maximise revenue and profit. And finally, celebrate being back to business in the office and share good news as it happens as the business regains its stability,” she says.

Maintaining key relationships during lockdown has been key for Australian beverage company Nexba CFO Gabrielle Grant.

She is looking for ways to work collaboratively with major trading partners to help nurture businesses back into economic normality, she says.

“This crisis is unique in that it impacts all businesses, and therefore everyone will be thinking and working through solutions to the problems you’re facing as well – asking for ideas and bouncing around these are a great way to work differently,” Grant says.

Top of mind for many CFOs will be the financial costs of keeping staff safe, with lawyers warning that employers could be held liable for workers who contract coronavirus on the job.

But a new PwC report reveals that CFOs are making plans to protect staff, with 76 per cent considering workplace safety measures and requirements such as masks and testing. And 65 per cent say they will reconfigure work sites to promote physical distancing.

5 Top Tips for CFOs:

1) Return slowly: A gradual return to full operations can save costs.

2) Focus on forecasts: Look closely at forecasts, production and cashflow

3) Stimulus packages: Get your head around the stimulus payments and ensure you are accessing what you are entitled to.

4) Negotiate: Conserving cash comes down to negotiating payment terms, rental terms and regular payments.

5) Communicate: Regular communication with staff about the return to work plans will be paramount.

Author: Nina Hendy

Nina is a leading Australian business & finance journalist. She also writes content for finance brands.