Weathering the Storm Part 9: Detailed Cash Availability Actions Steps

  |  June 4, 2020

image of a man writing in his notepad while sitting in front of his computer and tablet

The Covid19 pandemic has introduced a variety of challenges across corporate organizations. Crisis-mode has hit many small and mid-sized businesses. Active management of every invoice, sales order, and payroll must take place to ensure liquidity and maintain viability. Cash-impacting actions should be a part of the daily routine in today’s “new normal” including:

  1. Cut non-critical capex spending immediately – without question
  2. Extend payment terms to vendors if possible – work with them directly (we are all experiencing challenges)
  3. Communicate actively and continually with customers to reduce DSO and A/R aging
  4. Engage with landlords to abate or modify payment terms
  5. Leverage any and all government stimulus funding
  6. Forgo owner and/or management payroll, if possible
  7. Seek private or public placement debt facilities

The pandemic will end one day and relationships with customers, vendors, bankers, landlords, etc. should be managed in the most amicable way possible.

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