Pre COVID discussion with clients used to be about revenue projections, sales guidance, earnings outlook, strategies for increasing the EPS and more on the current state of the business. What will be your discussion with clients post-Covid 19? Any idea or preparation has been made in that context which will be part of your strategic cost advisory helping you in your job or practice. The business and its discussion point have changed completely now.
Those CMA’s or who are in the strategy, business development or any profession linked with the mid-level management who are doing job need to know what should be their new defined role to save and grow their career profile. Please cost accountants or other professionals don’t be under the impact of negative vibrations of an economic slowdown. This article also throws light on how the Strategic costing tools like life cycle costing, target costing and product mix will be beneficial rather heading blindly for cost-cutting and laying off people. Please remember your decision of cutting down cost will impact many families. Use the strategic cost management tool to save lives and families.
Economic slowdowns are the opportunities to grow one’s career provide you know where to strike and how to strike to achieve the growth opportunities. So let’s dig into some facts and advisory discussion points which will help you to understand and increase acumen and showcase your strengths too.
Post covid discussion with the client or in the job will be about debt management, asset quality, liquidity management, loan levels, covenants cash flow improvisation and more on the strategic segment. On needs to know these subject lines in terms of its impact based on the current slowdown and fall of demand. The person who is doing the job will find to be more valuable in an organisation if he/she comes up with an understanding on the subject/suggestions and areas to improve on these subject lines for the benefit of the organisation. Procurement, supply chain, production schedules-all of them needs a change so that the impact on business in terms of profitability and growth is improvised.
Many of my friends might say that they don’t hold such positions to discuss these things with their seniors. Well, don’t wait for an invitation. Become courageous enough to present your voice. It’s your job and its work responsibility as cost accountants to come forward and present your suggestions and idea. No one is perfect. Even the one who became President of the Institute also took the 1st step of career growth like this way.
Product life cycles will need a complete makeover in terms of cash flow generation. Life cycle costing comes into play in this segment. Focusing on product mix and cost mix for better resource utilisation rather focusing blindly on cost-cutting is not the advisory. You have to apply to replace box thinking and not out of the box thinking. Principles of target costing need to be applied since the raw material cost have come down and hence short term strategies of lowering pricing and renegotiation deals will be the ideal aspect to implement. Pricing of goods will play a bigger role in terms of the depth of your cost-cutting strategies hence focus on life cycle costing and target costing followed with product mix.
Risk management is now an old school of thought but it’s time for risk diversification in business. As a CMA or as any advisory business professional it’s now time to re-work on business strategy. We have to now build different scenarios and do an analysis of them so that we could get the best solution for any new or old strategy redefinition. We need to come up with scenario analysis which will help the organisation or your client to come up with an appropriate decision. Diversification of risk is now the new norm.
We need to think on the above subject lines since practising opportunities will increase as many companies will outsource their finance vertical. This will help the corporates to reduce their fixed cost. This is the place where the competition will intensify and hence you need to add the value propositions in your practice. You keep thinking about the business model of your client and working an extra mile will help you significantly. We are focusing on the development and survival of the professionals and also of the company. Ruthless cost-cutting is not going to work longer for the organisation. It will rather cut the hands of the system.
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