Crisis. A word that sends chills to anyone who breathes the entrepreneurial or corporate world. If it is accompanied by the word “financial”, the chill comes even stronger. But, thankfully, there is financial management. A sector that requires trained and experienced professionals, who make companies grow and even profit in times of crisis.
In this article, you will delve into crisis management, financial management, as well as its importance for finances in hazy times for business. Also, you will learn 3 tips that you can apply to your business to manage your finances properly and efficiently.
What is crisis management
Crisis management, or crisis management, is a set of actions and procedures to be adopted in the face of a crisis situation with the aim of minimizing negative impacts, in addition to identifying opportunities to improve the image and reputation of a business.
In order to have an efficient crisis management process, it is essential to periodically reassess the strategies adopted by the company, in addition to measuring the impacts caused, all this to guide any realignment of speech, positioning or even confidence that is necessary in relation to customers or the public. in general.
Management starts with assessing potential dangers, going through the creation of the contingency plan, to mastering the means of communication, both internal and external. That is, the goal is to take control of the situation and act with transparency, assertiveness and caution. There is a constant need to convey security and credibility.
It is also about a continuous learning process, through an overview of points, general and specific, of what can be improved using diagnosis of mistakes and successes of previous experiences, in order to anticipate or minimize future crises or the practice of same actions that cause harm.
Why focus on financial management in times of crisis?
Those who undertake know: in times of crisis, it is always necessary to be very careful in attitudes. Every step and every decision must be properly planned and analyzed. After all, the company has less income and any wrong step can result in huge losses. Financial management is precisely the part responsible for planning, controlling and strategic decisions regarding the application of the company’s money, which can grow even in times of crisis.
Every business seeks to grow and, consequently, earn more money. And financial management is the way to do that. Because it enables and provides practices and resources for specialized professionals to analyze scenarios and set goals. Thus, through calculated and strategically developed actions, the company can improve its results, in addition to the way of using its resources.
That’s what those responsible for financial management will do: through in-depth techniques and knowledge, they will find points of improvement throughout the company, in addition to managing the company’s money as well as its assets. In this way, they will seek to reconcile the company’s financial goals, such as cost reduction, with the objective of increasing the number of sales, for example.
However, make no mistake: financial management is not such a simple practice to apply in a business. Controlling the company’s capital requires, in addition to experience, a business vision, knowledge and the intelligent use of technological tools.
How to apply financial management to your business
A fundamental point that cannot be missing from financial management in times of crisis is the union of all employees in the mission to gradually overcome the moment of adversity. From this collective understanding, it becomes easier to put the other steps into practice. Check out 3 tips for good financial management in your business below:
I – Evaluate the business resources
You already know that the scenario is crisis. Because it is a problem arising from the macroenvironment, the resolution is not within your reach. In this sense, it is up to its financial management to assess current resources in order to be sure of the company’s real conditions. Calculate costs (fixed and variable), add up receivables and analyze exactly how much is needed to keep the business running.
II – Decrease possible expenses
Now that you know about the company’s real conditions, it’s time to start cutting costs. Although the financial survey does not indicate a worrying situation, during a period of crisis it is important to eliminate superfluous expenses or those that present low return. In addition, it is essential to evaluate points such as hiring outsourced workers, overtime, etc. In short, look at possibilities such as:
Decrease in payroll;
Reduction of working time;
III – Adopt a technological tool for financial control
Any analysis of resources and cost reduction requires a thorough and efficient study by the financial manager. Logically, such a detailed search cannot be performed manually. In addition to taking a long time, it runs a high risk of failure. Therefore, a financial management system is so necessary. With a specialized tool, you can keep full control of your company’s financial flow and make decisions based on concrete data. In addition, a financial management system is capable of automating various processes. This allows for a reduction in labor without compromising the company’s productivity.
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