Throughout 2020, financial leaders were pushed into a survival mindset, as the COVID-19 pandemic created uncertainty about their companies’ long-term (and sometimes, short-term) viability. As Ezequiel Minaya wrote in Forbes, “CFOs of some of the biggest companies in the world have struggled to integrate the fast-moving situation into projections, with some scrapping guidance altogether.”

Those who were fortunate quickly freed up cash to keep their businesses operating. In doing so, they were forced to acknowledge their own unpreparedness for similar macroeconomic crises in the future. Now, they need to establish best practices for their cash flow to anticipate and prepare for future disruptions—and therefore protect their companies’ long-term financial health.

Don’t Let Cash Flow Problems Catch You Off Guard

Financial leaders’ success in providing short-term continuity during COVID-19 has yielded some lessons for preparedness in the face of future crises. This article identifies five best practices for ensuring cash liquidity and successful, long-term financial management in the face of any major macroeconomic disruptions in the future.

1. Develop a Company Culture of Financial Health

Employees across departments must understand how cash flow affects them and their responsibilities. Specifically, they need a renewed focus on cash flow performance, characterized by a company-wide shift in attitude about cash flow.

Financial leaders must nurture appropriate levels of awareness across teams. This way, they can both rally employees around financial health initiatives and demonstrate that cash flow is an essential and potentially vulnerable part of the company’s well-being.

2. Connect Finance Teams in a Dedicated Digital Environment

Finance teams must learn to anticipate future disruptions, then visualize how those disruptions will affect the financial health of the company. This includes perspectives on how partners, vendors, and customers contribute to the company’s cash flow performance.

Dedicated digital tools can help finance teams visualize cash flow performance, tackle specific pain points, and incorporate multiple variables in a single environment. Support from artificial intelligence (AI) and predictive analytics ensures that their analyses provide greater strategic value for anticipating future disruptions.

3. Provide Finance Teams with Collaborative Tools to Tackle Major Challenges

Finance teams need specialized digital tools to help them take on core challenges and improve cash flow performance. Dedicated collaborative tools help them adapt financial models as new pain points or potential risks emerge.

For example, automated data collection and analysis, a cash flow CRM, and third-party integrations to address unique pain points can all exist in a single collaborative environment. These dedicated tools maximize the value of finance teams’ time. They, therefore, have more time freed up to prepare the company for future crises, and for cultural transformation efforts.

4. Employ AI-Driven Predictive Capabilities

Finance teams need better forecasting to prepare for future disruptions. AI-driven predictive capabilities help teams anticipate when cash flow problems may arise.

AI helps financial leaders anticipate both short- and long-term cash flow requirements. Decision makers can adjust the scope of analysis and improve forecasting accuracy under any number of conditions, such as potential delays in client payments or supply-chain disruptions that may jeopardize financial health.

5. Establish a Finance Center of Excellence That Focuses on Crisis Preparation and Success

Finance teams can operationalize these best practices by creating a center of excellence whose core function is to ensure consistent progress in these areas. This positions cash flow as a central pillar in the health of your company and the shared success of your employees. Most importantly, it formalizes ongoing action and preparedness to ensure the long-term financial health of the company.

Cash Flow Affects Everyone—Show Employees You Are Prepared

Your employees know the financial health of your company affects them and their families directly. Putting these best practices in place sends the right message, and helps protect them when the next global disruption arises.

Tesorio’s set of applications work together to improve your finance team’s cash flow performance. Our platform uses AI to automate rote tasks and facilitate collaboration, helping your finance team spend more time on high-value strategic activities and cultural growth. Contact a cash flow expert today to learn more.