The pandemic has put the spotlight on cash management. But at the same time, CFOs should be looking for ways to boost growth, Guita Sharifi, CFO of Learn4Life Network, said in an Argyle Digital financial leadership webcast.
If you're not already doing so, step up your cash flow projections from monthly to weekly and ensure your entire organization — not just the finance team — has made cash management part of its culture, she said.
Sharifi's company, which helps public school students succeed, designated a changemaker in each division to ensure staff make decisions with cash management in mind.
Sharifi also recommended investing in systems that can make managing cash more efficient, including an automated accounts receivable function, to get your money into the system faster and with less effort.
"Sometimes you have to spend money to make that bottom line look better," she said. "It might be a couple of months of spending and automating."
Improving your bottom line is a must to ensure you can access credit if you need to. "No bank will lend to you if your balance sheet doesn't look good," she said.
Looking ahead, consider investing in a chief innovation officer, if you don't already have an equivalent, to scout for ways to create revenue streams and boost profit.
"It's not a good time to slow down," she said. "Invest in R&D, assess your products and services, maybe even expand them. Your margins will drop. Your ROI will drop."
Sharifi keeps her eye on risk when determining where to put her working capital. She works closely with investment advisors to find the best short-term instruments while keeping her working cash relatively liquid. This includes a diversity of FDIC-insured bank accounts and short-term bonds.
"Buy CDs and your funds will be secure, because we never know," she said. "It's a risky environment."
Focusing on safety provides stability, even if it reduces opportunities for yield.
"Is your investment policy too aggressive?" she asked.
Some risks are worth taking as you focus on your core growth plan. One of the first things Learn4Life Network did, despite its move to remote work, is buy their building.
Although students are learning entirely remotely now, that won't always be the case. The current environment "is not going to be long-term," she said. "The students will go back to the classroom."
The company also moved to quickly expand internationally, capitalizing on the global shift to remote learning. "We set up a private international school, so now we have students from all over the world," she said.