The priorities for CFOs in 2021 were unveiled at the latest DFCG Financium. The year 2020 that we have experienced has put financial indicators for cash management on the podium.
What to remember about 2020
The urgency of the situation made it possible to forget about Ebitda and focus on short-term commitments. But also to take into account all the provisions offered to mitigate the impact of the first lockdown. The ultimate objective is to "generate cash".
Indeed, companies have made extensive use of state-guaranteed loans or partial unemployment. As a result, financial departments worked on takeover scenarios with agility and resilience. The winners were those for which the digital transformation had already taken place and the end of the spreadsheets was proven. All of which made it possible to simplify collaboration during the home-office period.
New priorities for 2021
The beginning of 2021 is still marked by a feeling of uncertainty weighing on a large number of activities. The exceptional situation we are experiencing tends to be a long-term one, with new directions for financial management. The barometer established by PWC and the DFCG on the priorities of CFOs maintains performance management as THE priority for the coming year. But, not surprisingly, Cash Management has moved up to 2nd place.
I am used to say that the subject of Cash Management fluctuates in the ranking according to current events; I had hoped for a 1st place for the year 2021. Firstly, because "Cash Culture" must accelerate its deployment within organisations. And above all because Cash is everyone's business in a company.
Emergence of useful tools for CFOs
The emergence of new tools makes it possible to simplify and automate the follow-up, to avoid the strong Intuitu Personae models made with spreadsheets by CFOs or treasurers.
Thus, the finance team needs to work collaboratively to produce easily:
- Cash reporting to understand its consumption,
- The main WCR indicators to monitor them and build an action plan with all the company's departments,
- A 3, 6 and 12-month rolling cash flow forecast to anticipate decisions and financing needs,
- Different operational scenarios to measure the impact on cash.
The production of this information has enabled Cashlab's clients:
- For some, to anticipate the repayment of their EMP and avoid an impact on their net debt at the closing of their accounts at the end of 2020,
- For others, to postpone the expected recovery of their activity and complete this work with an optimisation and cost reduction plan.
But let's remain positive, the stakes for 2021 remain high for the financial departments. Because with hindsight on the suddenness of the 2020 crisis, they are in a battle order on the actions to be taken and the tools to be found.
Closely monitor your cash flow in a clear and optimised manner with out Cashlab tool.