to create rolling forecasts, which allow for dynamic adaptation to market and economic shifts. Even if changes don’t materialise, developing habits that promote long-term resilience is critical. Monitoring free cash flow, or the funds remaining from regular business expenses, is vital. Doing so helps ensure awareness of available resources if circumstances change so that you can make quick, informed decisions when it matters. Analysing cash flow and assessing your working capital should be the first response to signs of an economic downturn. This continues with establishing rolling forecasts that will help you dynamically adapt to market and economic changes. Even if these changes don’t emerge, it is about creating habits that build resiliency in the long run and help ensure Finance leaders are proactively preparing for all eventualities and focusing on insulating their companies from economic fluctuations year after year. By doing so, they aim to make businesses more resilient and ready for almost any circumstance. No matter what economic challenges they face, these measures can provide a solid foundation for overall success. TRACK CASH FLOW CLOSELY AND UTILISE ROLLING FORECASTS When there are signs of an economic downturn, the first response should be to analyse cash flow and assess working capital. One effective technique is you can make quick and decisive decisions when necessary. This means keeping a close eye on free cash flow or money left from operational and capital expenses when it’s business-as-usual, so you’ll know what’s available if circumstances change. Once this visibility is achieved, CFOs can then implement rolling forecasts to ensure accurate and up-to-date predictions. In an uncertain economy, it’s better to forecast with a shorter timeframe so you can ensure more accurate cash flow projections. When making plans based on forecasts, don’t discount the possibility of unexpected changes. If situations materialise in unforeseen ways, you want to know your liquidity options and any alternative means of financing before it’s too late. Technology like When there are signs of an economic downturn, the first response should be to analyse cash flow and assess working capital. Although no company is entirely immune to economic downturns, certain industries and business models have demonstrated resilience and high performance even when other companies struggle to survive. 28 Finance Monthly. Business
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