In times of crisis, it might feel like there is little you can do to help your business survive. However, some small changes can have a big impact. Here 5 tips to improve cash flow during times of crisis:
- Monitoring cash flows and forecasts diligently: Cash flow statements must be timely, relevant and accurate. Forecasting monthly also ensures that the expenses and planned expenditure align with accounts receivable.
- Reducing variable costs: Assessing variable costs is an easy and quick way to reduce your cash outflow and focus mainly on fixed costs. If labour is a significant expense of the business, consider avenues that may reduce cash outflow without having to lay off employees. This can include encouraging employees to take available leave balances which will have the effect of reducing liabilities on the balance sheet.
- Manage receivables: Try to improve the rigour of collection processes and consider tactics to generate faster cash flow from your receivables. Another handy tip will be to reassess the invoicing and billing system to make sure invoices are accurate and timely, eliminating delays in receiving payments.
- Alternative supply chain financing options: Consider working with your customers to offer discounting solutions for customers that can pay more quickly.
- Understanding your business interruption insurance: Companies should have an in-depth understanding of existing business insurance policies and how the event of significant business disruption is covered. This will help the business plan better for the future in the case of a drastic event.
To find out more about the cash management options available to you, speak to us today on 1800 799 879 for a free, no-obligation consultation.