The Conference Board issued report that gives financial management leaders guidance on steps to arrest cost and revenue pressures during COVID-19 epidemic

Produced by:

Responding to the Coronavirus Crisis: Selected Ideas and Learnings for Asia’s Finance Management Leaders

Addressing Cost and Revenue Pressures – The Conference Board issued report that gives financial management leaders guidance on steps to arrest cost and revenue pressures during COVID-19 epidemic

Summary:

The Conference Board provides businesses with specific actions from a financial management perspective to deal with effects of COVID-19 crisis. Recommendations include:
  • Forecast Costs and Impact to Finances – Identify assumptions for cost containment, business impact and risk mitigation models according to different scenarios, considering daily trends, cash position, credit line balances and financial results
  • Seek Available Economic Relief – Actively pursue benefits from government and banks, such as extended payment terms, interest and tax holidays, public subsidies and grants, while negotiating for best possible terms
  • Revisit Credit Guidelines – Update credit approval processes for existing distributors and customers to provide more generous terms, build scenarios to estimate impact, and make sure there is funding for opening new customer and supplier relationships
  • Reduce Liabilities – Work with Legal team to provide all data on agreement with customers in case of missed deliveries, and offer available alternatives and substitutes even at lower margins, to prevent loss of valued customers
  • Establish Emergency Fund for Employees – Collaborate with HR to create emergency fund for employees’ healthcare such as additional insurance and evacuation, support for staff in quarantine or whose families are infected, as well as cost of flexible work and preventive care
  • Be Careful When Cutting Costs – Focus on targeted interventions, which are more understandable to members, than generic cost cuts that undermine morale, such as across-the-board salary cuts
  • Inform Investors – Quickly establish communications plan for investors, like issuing profit warnings for listed firms, and being transparent with owners for unlisted companies, while projecting confidence that company’s leadership is on top of crisis
To read more about report for free, please visit https://www.amchamchina.org/uploads/media/default/0001/12/067bbbb6556d63917814915db639707d8acc70f4.pdf
Company: The Conference Board
Categories: Cash flow and financial management, Customers, relationships and channels, People and culture, Revenue protection and opportunities, Strategy, Supply chains

Original publication date: March 1, 2020

Date last updated: April 23, 2020