Dynshaw is the CFO of Soldo. Prior to Soldo, Dynshaw worked at Cobra, CreditEnable and Lebara, amongst businesses. Soldo is the spend management solution which streamlines the entire business expense cycle – from payment to reconciliation.
When managing company spend during COVID-19, cash is no longer king, cash is now God. Dynshaw, the CFO of Soldo, talks about finding balance in a crisis, as well as new sources of revenue, and the importance of budgeting and forecasting.
Our CFO had a lot to say about preserving cash in a crisis. He started by addressing the need to budget, reforecast and streamline all costs. And for these steps, having access to real-time financial information is critical.
At Soldo, we’ve been maximising our own product, which gives us this instant information, to control spend at source. We can restrict company card spend by setting weekly and monthly budgets on cards, while keeping track of spend as it happens.
But there’s a lot more you can do to find balance in a difficult time, for instance:
On the last point, Dynshaw emphasised the importance of keeping customers interested and paying during uncertain times. Which brings us to the next point.
Switching your focus from customer acquisition to customer retention is a huge first step in surviving a crisis like COVID-19. This doesn’t mean that you shouldn’t look for new sources of revenue.
Expand your horizons, find new use cases for your products and services, research new markets and the opportunities they can bring you – especially those with the potential to come out of the crisis first.
Dynshaw is a strong proponent of the ‘fail fast’ motto. He believes businesses should identify what’s not working as soon as possible. This will ultimately give you more time to explore what is working.
With this approach, you should also extend your cash runway as much as possible. It will not only help you survive this difficult time, but also ensure that you’ve got enough to build momentum once you come out of it.
Crisis or not, the CFO role is critical. But in uncertain times, there’s definitely a spotlight on cash management to ensure the business has got the funds it needs.
In this setting, forecasting and planning become essential. And if, on one hand, this is easier to do when your focus is on costs rather than revenue, it’s also very difficult to predict when things will go back to normal.
In a crisis, you can’t rely on customer payments. You’ve got to consider that your customers might not be generating as much revenue, and they may not be able to pay you in the time frame they used to. So, it’s especially important that you keep your spending in check.
One of the first decisions our financial team at Soldo made when the pandemic hit was implementing Zero Based Budgeting (ZBB). We budgeted from scratch, and it forced us to look at our cost bas. When you do this, it’s important to look beyond profit and loss, and scrutinise your balance sheet and cash flow.
When something shakes up your business as this pandemic likely has, it’s not so much about what you need or what you don’t need, and more about prioritisation.
Maybe you’ve got a lot of expenses that you need for investment in long-term growth, but they’re not needed right now. Right now, your priority should be cash management and protecting against customer churn.
This also affects the metrics you’re choosing to keep a closer eye on. Spending, cost control, and customer behaviour should be at the top of that list.
And the only way to do this successfully is to have instant data to alert you of what’s working or not. Real-time reporting and analysis are critical during this period – don’t take their value for granted.