CFOs balance two objectives — the financial and the operational — in the midst of the coronavirus outbreak. One thing is clear: the operational is the more certain of the two.
It's virtually impossible for CFOs to determine the virus' financial impact, but it's part of their job to create a roadmap for moving forward.
"Every CFO is remodeling right now for this unprecedented time," Elena Gomez, CFO of ZenDesk, said on the CFO Thought Leader podcast. "We’ve probably run 40 models in [recent] days."
In her modeling, Gomez is factoring in international issues, domestic issues, looking at her company’s enterprise business, its small-business offerings, and seeing how their business succeeds assuming a quick turnaround in the economy and the opposite of that: a drawn-out recovery. "You can imagine all of these permutations together is really important," she said.
In his scenario planning, WalkMe CFO Andrew Casey said he's trying to give his leadership team a realistic picture of their revenue over the next few months, assuming some customers simply won’t pay.
"How much do we really believe we’re going to sign up this quarter and how much do we really believe we’re going to be able to collect by the end of the month?" he said. "It’s going to be a defining moment." WalkMe provides software to make it easier for employees to use their company’s digital tools.
To get a sense of which customers are likely to pay, Terry Schmid, CFO of Topia, a platform to help HR teams manage gobally deployed employees, said he's keeping tabs on customer interaction. "Are they engaging? Disengaging?" he asks. "Are they slowing?"
Bob Feller is CFO of Workforce Software, which helps HR departments comply with internal and external employee rules. In his modeling, Feller says, no scenario is too extreme.
"What if your customers just stop paying your bills?" he asked. "If I’m an airline, I’m just going to say, 'I am not paying my bills for 60 days.' What are you going to do? If enough people do that, what does that mean to us as a company in a growth mode, spending more than we’re taking in?"
Operational issues more clear-cut
Unlike their efforts to understand the company financials' direction, CFOs are finding it easier to retool their processes to maintain their business operationally.
"We have been really focused on following every CDC guideline and keeping everything safe as precisely as we can," says Sameer Bahrgrava, CFO of commercial property builder Clark Construction. "We not only have our people at the job sites and in the corporate offices, but we also have a lot of subcontractors."
As a manufacturer, LED lighting company Energy Focus in Solon, Ohio, depends on its workforce continuing on-site work. It has taken steps to sanitize and disinfect its facility while not requiring workers to come in.
"[Some employees] have to be here, because we manufacture and ship," Energy Focus CFO Tod Nestor said. "If we keep the business open, we have to do that. While we can, we will, unless the government mandates shutdowns. If employees are uncomfortable coming in, we’ll give them the option not to. I don’t want to place our colleagues in a position where they feel really uncomfortable."
Carolyn Koehn, CFO of integrated platform provider Boomi, doesn't have the on-site issues of a manufacturer or construction company, but with her finance and accounting teams working remotely, she is still concerned with efficiency issues. She's pushed for more customers to make digital payments, which are easier for her stretched staff to process.
"We’re seeing which customers generally pay by check, and reaching out to them to coordinate electronic payments," she says. "We can leverage the electronic tools for accounts payable versus approaches typically involving a manual check. We won’t have the same productivity when folks are working from home; it’s not an uninterrupted work environment."
Schmid and other executives at Topia mapped out a remote-plan weeks ago and now they’re executing on it.
"At least for 30 days, we would close all of our offices around the world and send everybody home," Schmid said, adding that employees use Zoom and Slack to communicate.
Because all organizations are experiencing the same upheaval, Casey said, companies must take the long view, building flexibility into their operations, to guide their customers through.
"Hopefully we’ll do the right things, with respect to helping our customers," he said. "I would like to see, if someone's going to write about what we did during this time, that [we were] a real partner to our customers. That’s the legacy I want to make sure we leave."
Casey said one of its customers, the French Ministry of Health, contacted WalkMe asking for help bringing doctors onto their platform so they could use it during the pandemic.
"We didn’t wait for the paperwork on that," he said. "We just did it. And that’s the response I’m so proud of. We took the customers' situation first, and we implemented it."