Mid-Year Finance Reset for PH SMEs: A 90-Minute Review to Protect Cash in H2

The Importance of a Finance Reset

In today's rapidly changing economic landscape, the need for a finance reset has become paramount for mid-size companies. Protecting cash is not just a matter of maintaining liquidity; it serves as the lifeline and health indicator of the organization. A proactive approach to financial management empowers companies to safeguard their resources, ensuring they can weather unforeseen challenges while positioning themselves for future growth. By prioritizing cash protection, businesses can enhance their resilience and adaptability, ultimately leading to sustained success in a competitive environment.

Establishing a regular cadence for reviewing these key financial areas will help mid-size companies maintain financial health, make informed decisions, and navigate potential challenges effectively. By fostering a disciplined approach to financial oversight, founders and CFOs can ensure that their organizations are well-prepared to adapt to changing circumstances and seize growth opportunities as they arise.

Area	Checklist Item	Description
Cash Position	Review Cash Balance	Review current cash balance and forecast for the next 3 to 6 months to ensure liquidity and operational stability.
	Analyze Cash Flow Statements	Identify trends and potential shortfalls that could arise due to seasonal fluctuations or unforeseen expenses.
	Assess Funding Needs	Explore options for raising capital if necessary, evaluating cost of capital and potential dilution of ownership.
Accounts Receivable (AR)	Evaluate Aging Report	Identify overdue accounts and collection issues to prioritize collection efforts.
	Implement Collection Strategies	Improve collection processes and reduce days sales outstanding (DSO) through clearer payment terms and incentives.
	Monitor Customer Credit Risk	Adjust credit limits as needed based on regular credit assessments of customers.
Accounts Payable (AP)	Review Payment Terms	Negotiate better terms with suppliers for flexibility in cash management.
	Analyze Aging of Payables	Manage cash outflows effectively by prioritizing which invoices to pay first.
	Ensure Compliance with Payment Schedules	Maintain supplier relationships through timely payments.
Inventory Management	Conduct Inventory Audit	Assess current stock levels to meet customer demand without overstocking.
	Evaluate Inventory Turnover Rates	Identify slow-moving items and implement strategies to clear excess inventory.
	Adjust Purchasing Strategies	Optimize stock levels based on sales forecasts and inventory analysis.
Budget vs Actual	Compare Actuals Against Budget	Assess performance to highlight areas of overspending and underperforming revenue streams.
	Identify Variances	Analyze reasons behind variances to improve forecasting and strategic planning.
	Adjust Forecasts and Budgets	Ensure the financial plan aligns with company goals and market realities.
Near-Term Risks	Identify Potential Risks	Prepare for risks that could impact cash flow, such as economic downturns or supply chain disruptions.
	Evaluate Impact of Regulatory Changes	Stay informed about industry regulations and market dynamics affecting operations and costs.
	Develop Contingency Plans	Ensure business continuity by creating emergency funds and exploring alternative revenue streams.

CONCLUSION

Establishing a regular cadence for reviewing these key financial areas will help mid-size companies maintain financial health, make informed decisions, and navigate potential challenges effectively. By fostering a disciplined approach to financial oversight, founders and CFOs can ensure that their organizations are well-prepared to adapt to changing circumstances and seize growth opportunities as they arise.