“Certainty is the best friend of the CFO. Joy Taylor, managing director at Houston-based AlliantConsulting, said: Of course, moments of confusion and uncertainty are another issue.
The controversial international trade environment and the US's aggressive stance on tariffs certainly could throw a wrench into many carefully thought out business plans. Not only companies importing and exporting tangible goods, but all sectors of the US economy can be affected.
How should CFOs approach this period of this potential rapid change in government policies and regulations? In an interview, Taylor shared the advice she is offering to her CFO clients.
What plans should CFOs plan today to prepare for future US policy changes in international trade and other areas?
Despite news of the new administration's intentions for economic policy changes such as new tariffs, those exact changes remain unknown when or even when. Nonetheless, preparation is important.
CFOs need to closely monitor policy development. For example, organizations that rely heavily on imports or exports should actively plan multiple tariff scenarios to see their potential effects.
These steps allow the fiscal sector to predict which levers will need to be pulled if these policies move forward. In line with these policies, we recommend reviewing the terms and conditions of the supply chain and suppliers, assessing tax credits and incentives, and devising cash and liquidity management plans for various scenarios.
It's time to strengthen your risk management efforts and use robust data, analytics and forecasting capabilities.
Is it possible to overreact?? Is it beneficial to map these potential trade policy mapping models this early?
The goal is to prepare without being paralyzed by overplanning. CFOs should aim to be prepared to enhance decision-making and risk management without undermining business priorities or creating excessive stress within the organization.
They know that there are CFOs who are worried about starting this planning process because they have no experience. That's fine. If this isn't a familiar muscle, find it, build it, or rent it. Any plan goes a long way in preventing assumptions and decisions that are not supported by data.
Remember, this is not a one-off exercise. All modeling scenarios should be reviewed regularly for accuracy and updated as new information becomes available.
Do these policies need to be enabled and have a significant impact on a particular sector? How can CFOs navigate the changes to the fullest?
These moments of confusion also present great opportunities to improve the capabilities of the CFO's office. Continuing to inform policy and government impact, being thoughtful and attractive technology, transparent about challenges, and sharing company responses will help you lend as stronger and more competitive .
Oil, gas and utility companies often need to deal with legislative disruptions. They have a strong track record of leaning towards digital transformation in their financial planning to respond dynamically. That approach is permitted [my] Clients in these sectors will make the most of policy changes and deepen their relationship with regulators.
The secret is to continue to be flexible and moving forward as we tackle the challenges and opportunities of this new policy environment. It is recommended that all CFOs lean on the challenge and embrace the timing. This turbulent time is an opportunity for financial institutions to shape the future of the company.
