During any protracted period of crisis, the ability of an organization to manage cash and cash flow becomes a vital operational tool that impacts success, now more than ever you need to implement a great Cash Flow management.


The focus of most businesses is now on protecting employees, understanding the risks to their business, and managing their resources the best they can to avoid businesses closures.


Here are some key steps you can take now to help ensure your organization is prepared to manage the escalation of challenges associated with COVID-19, as well as prepare for the potential economic aftermath ahead.


1. Ensure your own financing remains viable. In these circumstances, don’t assume the financing options you previously had available to you will continue to be available. Undertake scenario planning to better understand how much cash you’ll need and for how long. Use this opportunity to actively engage with your financing partners to ensure your available lines of credit remain available, and to explore new or additional options should you require them.

2. Prepare a 13-week short term cash flow forecast to identify what your business’ cash position looks like on an ongoing basis. This should be a rolling document that is used as a management tool not only to assess what payments can/should be made but also to ensure all parts of your business perform as well as they can.


3. Review your direct debits and standing orders to ascertain which payments are business-critical.


4. If you might struggle with your next Use and Sales Tax payment due to COVID-19, most States are offering to file an extension and giving 60 days to make the payment. 


5. Determine whether your staffing levels are adequate and seek advice if you need to reduce the workforce/hours. 


6. Understand what your debt obligations are (both for the business and the directors personally) and seek to negotiate payment holidays if appropriate.


7. Seek rent payment holidays where possible.


8. Speak to your customers to obtain payment dates for outstanding debtors – consider their ability to pay if agreeing to longer terms.


9. Negotiate with suppliers to ensure your ongoing orders can be sourced and delivered; identify alternative suppliers for any business-critical item.


10. Ongoing funding is likely to be a concern for many. For any funding that is required, if you cannot demonstrate to a funder that you have taken the above steps then it will be more difficult to obtain funding, whether or not backed by the government.


Now is the time to take action, even if you have a buffer that may see you through a short period. Contact your current bank/lender and consider their rules.

At My Books and Taxes we count with the expertise to support our clients in viewing the short- and long-term impacts of decisions that are being made in real time.