Across the UK, businesses are moving away from the crisis management that has become the norm in recent months and are instead looking at life after lockdown, according to Kate Curnow, deputy CFO of Honda.
Curnow was speaking at the Virtual CFO Agenda alongside Graham Heaven, director of IT and finance, distribution and HR at Burbidge & Sons; Sabby Gill, managing director of Sage UK and Ireland; and Rachel Seymour, head of product at Sage, when she made the comments.
“We’ve gone through that initial crisis, so now we’re starting to think about how we come out of it. We can see the government support is going, so what are you bringing in, how do you bridge that gap?
“How do you get from where you are today, when staff are furloughed and you’ve got other forms of support coming in, through to when you’re up to what might be called a ‘new normal’”, she added.
Chancellor Rishi Sunak announced in May that the furlough scheme would be extended from June until October, despite the estimated total cost to the taxpayer being over £80bn according to the Institute of Fiscal Studies.
However, the four-month reprieve for UK businesses will not stop a sudden rise in costs when the scheme does eventually come to an end. As a result, CFOs need to be thinking about creating ways of having the foresight necessary to tackle these challenges, said Gill.
“One of the things that small businesses really worry about at this precise moment is covering wage costs, running costs, bills, property overheads and supply chain disruption. It is almost a third of what they think about now. It is all about, how do I manage my costs,” Gill said.
“Having the foresight of knowing as these bills come in, and as these bills go out, there’s going to be a point at which I am going to run out of money potentially. Anything that can give me some foresight on when that’s going to happen, so I can start bridging loans and putting things in place to manage that – technology is the only way of doing it. There’s no other way.”
Gill added that technology was crucial to firms working their way out of lockdown as it provides the predictability which will be important when dealing with such a fast-moving scenario as the social distancing rules change week by week.
The panel agreed that technology was necessary for firms to move successfully and with the necessary agility once lockdown measures were eased. Seymour added that it was particularly useful from a cash forecasting perspective as those without the technological tools to forecast would not have enough time to be able to use that forecasting data before the scenario had invariably changed.
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“We’re all feeling there are only so many hours in the day, and if you have to spend those hours, given how often you’re redoing your scenario, building your cash flow forecast, if that’s all you ever got to do, you would have never had the opportunity to say, ‘and now what?”