06 May Accotax – 3 Ways to Adjust Cash Flow Management for Businesses During the COVID-19 Outbreak
Countries across the globe are put to a pause as the worldwide COVID-19 outbreak creates a rift in the economy. Businesses of various industries and scales are under a dark cloud of confusion as hourly updates of restrictions on everyday life, travel bans, and the increase of infected cases continue to rise.
Various communities are now in quarantine, and the lockdown is affecting businesses left and right – which begs the question: how do you keep your cash flow running as smoothly as possible during this economic slowdown? The guide below should help keep your financial health afloat during these trying times.
Tip #1: Review and Make Necessary Changes to Your Cash Flow Budgets
Keeping track of your cash flow during this economic unrest is more critical than ever, especially since you need to get a head start on the impact the pandemic will do on your financial status.
This means you need to regularly make informed forecasts so that your resources should stay and which areas can be temporarily cut back. Identifying your estimated reduction in revenue should also help your business know-how to continue paying suppliers, ensuring that your company can still repay any debts.
Tip #2: Thoroughly Evaluate Financing Options
Businesses have various financial facilities that give them the liberty to adjust necessary payments and have a back-up for their cash flow. During these challenging times, taking a closer look at your financing options and assessing whether you can roll out financial relief measures from these is a wise step.
Evaluating your bank or financier, for instance, gives you the benefit of knowing whether your existing lines of credit are still healthy and accessible. On the one hand, you can also try your hand at factoring if you need to produce cash flow quickly for your receivables.
Tip #3: Ensure Accurate And Timely Financial Reporting
Having a full overview of your financials has always been vital to maintaining the financial stability of your business. Now that companies worldwide are experiencing one of the most challenging economic shifts staying up-to-date at a prompt speed is essential.
With that in mind, accurate and timely monitoring of your profitability, overheads, stock levels, and other balances matter as the clock is ticking faster for everyone during this pandemic.
Businesses predict a great recession is on the horizon, so having a grip for all your financial features at every stage of your operations is key to finding a solution that allows you to streamline your cash flow.
In Conclusion: Keeping Your Cash Flow Running During a Global Crisis
Now that the entire world is experiencing an economic crisis due to the COVID-19 pandemic, businesses at every turn are worrying about how to keep the lights on when every sector is on lockdown.
Having a reliable accountant during these hard times is critical, as their expertise can help you get a grip on your cash flow and weather the storm. From modelling your revenue according to the current needs of your business, forecasting cash flow, to providing a smart approach to financial relief.
If you’re looking to consult with accountants in London, get in touch with us today! We’re happy to help.