Cash Flow Management for Female Founders with Analisa DeHaro – Partner, Strategy KPMG

2020-08-18T15:07:32-07:00 August 18th, 2020|Business Planning/Strategy, Financing Your Business, Operations|

Last week the Center hosted an incredibly insightful learn-in with Analisa DeHaro, Partner in Strategy at KPMG. Intended for female founders and hosted by our Executive Director, Nicola Corzine, the webinar focused on preserving and nurturing value in the uncertain times related to COVID-19. Analisa shared tremendous insights with us as we to try to navigate more smartly and intentionally our financial health during these difficult times.

During the presentation, Analisa noted that “our cash culture is one of the most important things to prioritize and own as a business leader in these times. Find ways to pull your team, your customers, your vendors, and yourself into the conversation on culture to provide the greatest and optionality and flexibility in this time.”

You can watch the Learn-In in its entirety below and on-demand here or on Facebook.

Here are a few of the major themes and key takeaways that were discussed:

  1. Key themes that emerged from KPMG’s July 2020 Pulse Survey:
    1. Long Road to Recovery – Most surveyed anticipating full recovery will take two plus years
    2. Consumer Mobility – More permanent shift to working, learning, and buying things from home (60%+ will continue to work remotely)
    3. Back to School Spend Surprises – Large upticks in school supplies, computers, and hardware
    4. Holiday Spend Preview – People already making purchases for this upcoming holiday season
  2. Future Models for Sustainability – Alleviate cash pressure and the 13-week cash model to figure out survivability in this moment. Cash forecast as a knock off effect on the revenue forecast. What levers can the organization pull and where are the best opportunities to make the moves that will lead to long term survivability?
  3. Five major buckets of economic risk / levers to pull:
    1. Active Expense Management: Vendor management through rent abatement, payment terms and negotiations.
    2. Revenue and Cash Forecasting works hand-in-hand with Scenario Planning and Management: To what sources of cash does a company have access? What can they do from an internal process to get granular and get ahead and help you spot different areas of opportunity?
    3. Stabilize Supply Chain: If there may be supply chain issues, pre-order items that may be scarce. Forecast what clients may buy and gain effort by having those supplies at the ready
    4. Customer Centricity: Focus on the customer from two perspectives
      1. For those existing customers with outstanding payments, what can companies do to be more aggressive about watching and monitoring those situations, so they aren’t surprised by liquidity issues on the customer side.
      2. How can you pivot to best meet the needs of your customer and partner with key customers to avoid disruptions in process that will impact revenue.
  4. The Four C’s – Assessing and addressing your cash management needs:
    1. Cash – What is the available cash and access to cash from internal liquidity to external funding?
    2. Cost – What costs are absolutely necessary? The minimal expenses to manage versus what can temporarily be put on hold.
    3. Customer – Matching customer needs
    4. Capital
  5. Four steps to protect and preserve cash and working capital:
    1. Establish Visibility
    2. Optimize cash-management processes
    3. Get ahead of spending
    4. Tap external sources of cash
  6. Working Capital: Companies are pivoting and considering on what they should be focusing and where they should be putting their money. You can grow and grow profitability and gain greater optionality during uncertainty. This is not a sprint; it is a marathon.
  7. Performance Enablers to Improve Liquidity and Working Capital:
    1. Organization – End-to-end process management
    2. Visibility – The best companies are data centric and performance focused
    3. Control – Who has the sign-off and authorizations?
    4. Capability & Technology – Skills and talent management and process management are key.
  8. One of the top priorities for companies during these times is preserving liquidity.
    1. The extraordinary efforts to contain the COVID-19 outbreak have triggered a perfect storm of demand shocks and supply-chain disruptions. The ensuing cash crunch threatens companies across industries. Getting ahead of this rapidly evolving situation is proving extremely difficult, but companies still have time to control the damage.
    2. To preserve liquidity, they need to move immediately to prepare a structured response to the cash-flow challenge to weather the storm and emerge fit and strong after the epidemic peaks. There has never been a time for companies to address their working capital management with more urgency.

Thank you again to Analisa and the KPMG team for presenting us with such helpful information. Enjoy!

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