Financial Services Ireland

The CFO Agenda

Practical considerations for finance leaders on the impact of Covid-19

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The initial response of organisations to the Covid-19 pandemic was defence. We saw CFOs and finance leaders focusing on fast-moving financial planning and transitioning to virtual working where possible.

As CFOs transition from a ‘resilience’ phase to a ‘new normal’, finance must provide more than a business as usual service and become far more agile to meet the rapidly changing needs of the business. In many ways a complete transformation will be required.

Our recent paper, which you can download below, discusses priorities for the CFO and wider business. It poses seven challenges to consider when leading the finance function through an initial recovery phase:

  • How do I adapt my workforce and organisation to the new business landscape?

Staff expectations of working from home will increase. This will require a repurpose of office space, from delivery to social and collaborative interaction, and require changes in how staff are managed and evaluated.

  • How do I drive cost efficiencies whilst building resilience for the future?

Finance will need to lead by example in demonstrating strict cost discipline, accelerating automation and leveraging technology solutions to remove manual tasks. In the short term, finance leaders will need to target activities that can cease, in addition to supporting the business in protecting and growing revenue and margin.

  • How do I plan for, measure, and drive performance in the future?

The organisation’s current approach to planning and measuring performance may need to become more dynamic and leverage new technologies to support the business in navigating the uncertainty.

  • How do I maintain financial control and financial reporting compliance?

Given the change brought by Covid-19 to both business and work practice, CFOs should review their control environment to ensure that risks of fraud and other risks continue to be appropriately mitigated. CFOs should also ensure they have considered the key areas of impact of the pandemic when reporting under IFRS.

  • How do I act on tax implications and opportunities?

There are wide-ranging tax implications to consider from the impact of Covid-19. From the utilisation of new tax losses, to the impact of changes in the capital structure and transfer pricing arrangement of groups the CFO will need to ensure tax compliance and awareness in a new and changing environment.

  • How do I manage mergers and acquisitions activity in these turbulent times?

Organisations should reassess ongoing M&A activity to ensure that the original investment proposition is still valid.

  • How do I optimise the management of my balance sheet?

The CFO must tighten cash management practices to mitigate the impact of future uncertainty. Key steps include bringing cash under central control, exploring balance sheet cash optimisation levers, and adoption of a governance system that ensures cash considerations are a continued focus in business decisions.

EY can help you with your Covid-19 response. Please reach out if you have any questions.

Thought Leaders

Danny Buckley

Banking & Capital Markets, Sector Leader

Ken Phillips

FS Partner, Financial Accounting Advisory Services