Recession planning is about control: controlling cash, controlling margin, and controlling decision speed when the market turns. A fractional CFO gives you executive-level finance leadership on a flexible schedule to build your runway, pressure-test plans, and align Sales, Ops, and Finance around actions you can take this quarter.
Why plan now (not after revenue dips)
Downturns punish slow decisions. The companies that outperform do three things early:
- See the leading indicators
- Lock in cash and pricing discipline
- Align the team on a clear playbook.
Recession planning services put those pieces in place before you need them.
What a fractional CFO actually does for recession readiness
1) Early-warning dashboard
- Weekly view of bookings, pipeline slippage, gross margin mix, win rates, and unit economics.
- Leading indicators flagged with thresholds and owners so actions trigger automatically.
2) Cash runway and 13-week model
- 13-week cash forecast with receipts cadence, vendor terms, payroll, and debt service.
- “What-if” levers for volume, price, collection speed, inventory levels, and operating expenses.
3) Working-capital quick wins
- Tighter accounts receivable discipline (credit policy, deposit rules, collections playbook).
- Inventory reduction without stockouts; purchase order pacing; vendor-term renegotiations.
- Accounts payable strategy that protects relationships while extending runway.
4) Margin defense and pricing architecture
- Cost-to-serve and product/customer profitability to kill value leaks.
- Pricing guardrails (floor/target), surcharges, and discount governance tied to ROI.
5) Scenario planning you can run like a drill
- Base/downside/severe cases with trigger points (e.g., bookings down 15% for 6 weeks).
- Pre-approved actions for each trigger: spend cuts, hiring pause, SKU rationalization, contract re-price.
6) Cost discipline without gutting growth
- Rank expenses by strategic value and cash impact; shift from “cuts” to “reallocations.”
- Freeze nice-to-have tools, protect customer-retention and top-of-funnel programs that pay back fast.
7) Capital and lender readiness
- Covenant monitoring, borrowing-base clarity, communication cadence.
- Lender package with credible forecast, sensitivity tables, and mitigation plan.
8) Operating cadence that keeps everyone aligned
- Monthly close in 5-7 business days with a simple board-ready pack.
- Weekly working-capital meeting; biweekly pricing review; monthly scenario refresh.
- KPIs tied to owners and actions, not just charts.
Your first 90 days with recession planning services
Weeks 1-2: Stabilize and see the field
- Cash triage and 13-week forecast
- Accounts receivable/accounts payable policy tune-up and inventory priorities
- KPI and reporting gap assessment
Weeks 3-6: Build the playbook
- Driver-based 12-18 month forecast with base/downside/severe cases
- Pricing guardrails and discount governance
- Working-capital operating rhythm and collections playbook
Weeks 7-12: Operate and iterate
- Close calendar and board-quality monthly reporting
- Trigger-based action plan rehearsed with leadership
- Lender communications and capital roadmap (if needed)
The recession readiness checklist
- We can forecast cash for 13 weeks and 12–18 months with clear assumptions.
- We have pricing floors, discount rules, and a margin-by-product/customer view.
- Our day sales outstanding, days inventory outstanding, and days payable outstanding are measured weekly with targets and owners.
- We know the exact triggers that move us from base to downside to severe, and what actions follow.
- Our close takes 10 business days or fewer and produces a concise, decision-ready packet.
- We have a lender package ready and a cadence for proactive updates.
If you can’t check at least four of these, start now.
Common pitfalls (and how a fractional CFO avoids them)
- Lagging indicators masquerading as insights: Replace rear-view metrics with pipeline, mix, and margin drivers.
- Across-the-board cuts: Reallocate toward retention, high-velocity acquisition, and profitable SKUs.
- Frozen pricing: Use floors and surcharges; price courageously when costs and mix shift.
- Wishful forecasting: Run scenarios monthly and commit to trigger-based actions.
- Slow close: Shorten the close to compress reaction time and avoid expensive surprises.
Next steps
If you want to reduce risk and move faster when the market slows, consider recession planning services with a fractional CFO. Reach out to New Life CFO today to determine what the next best steps are for your company’s specific scenario!
FAQs
When should we start recession planning?
Before you see revenue decline. Build the model and playbook while you still have options.
How much time does this take from our team?
Expect 2-4 hours per week from finance and functional leaders during the first month, then less as the cadence locks in.
Do we need a new system to do this?
Not initially. Start with current tools and a disciplined cadence; upgrade systems when the process is working.
Will a fractional CFO manage our accounting team?
Yes. They lead finance, mentor your controller/bookkeeper, and bring in trusted resources to close gaps.
