The value of contingency planning during times of crisis

By Jessica Salerno, OSCPA senior content manager 

Businesses still recovering from the impact of the pandemic need to seriously consider contingency planning to protect their future. 

“I'm worried businesses aren’t taking it as seriously as they should,” said Jim Lindell, CPA, CSP, CGMA, president of Thorsten Consulting. 

With competing priorities and trying to stay afloat during the pandemic, contingency planning might not be a top concern. But Lindell said there will always be a potential future event that could devastate a business. He will present Controllers Update: Planning for Opportunities and Challenges at the Hot Topics for Corporate CPAs Virtual Conference on April 28 where he’ll examine the role of strategic planning and contingency planning to prepare organizations for the future. 

Man smiling for camera.

Lindell said the starting point is to look at how closing temporarily or limiting operations could impact the business, enterprise value, stakeholders and employees. These conversations don’t have to belong, he said, but they should be had to give businesses an idea of how to react before the time comes. 

When doing strategic and contingency planning, Lindell said it’s valuable to look at future opportunities and challenges as well. Consider robotic process automation, artificial intelligence and big data. Those are areas to explore when looking at how to do business differently and potentially leverage in an unexpected environment. 

“There are different opportunities that can be dealt with in terms of the business models and new development tools,” he said. 

Lindell will also be speaking on “Forecasting and maintaining adequate cash flow and working capital.” 

“The more prepared you are in understanding your cash and your working capital, the better your chance is going to be to keep your company afloat,” he said. 

He encouraged professionals to consider switching financial information to graphic visualizations and supplementing those graphics with additional financial information. The impact it can make in communicating valuable information can make a significant difference.