Cash is King

Medium and small sized companies need to assess and adjust their cash-management strategy to meet
the challenges of this post-pandemic time in business. CEOs and CFOs should have better visibility and
greater clarity on their expected cash flow and borrowing capacity.
Those with a plan to increase liquidity for working capital will be more successful when lock-downs end
and businesses comes back.
It is anticipated that business owners will experience highly challenging economic scenarios through the
end of the year and beyond. 
Where you think you will end up with services rendered, orders fulfilled and expected volume between
now and the end of December, will determine how much capital you will need to continue operating. 
You should strengthen your financial tools now so that you can better navigate this precarious climate.
Here are three tips to get you started.
Develop projections and cash flows. If there ever was a time to consider preparing projections and cash
flows, it's now. While predicting through year-end will be challenging, you should complete a forecast to
the best of your ability and update it at least monthly as your information improves.
Use these forecasts, as well as downside sensitivities, to help you manage your business toward
profitability in 2020 as you assess potential overhead reductions and sales initiatives. It will be equally
useful to your bank, both to anticipate your company's needs as well as to help your banker respond to
any modification requests you might have. 
I highly recommend preparation of a 13-week cash flow with collateral availability that can help you to
actively manage and maximize your cash and working capital. As an added hint, the abrupt disruption of
most businesses during the last months, it is likely a prerequisite to understand the cash flow and
collateral availability necessary to support your sales objectives for the last third of the year. Banks are
going to be cautious to ensure they can recoup funds.
Enhance accounting, cash management or corporate finance function. We all know it is easier to run a
business when things are good as opposed to periods of extreme economic stress. The current situation
we have been faced with is unprecedented. Some experts are predicting that the consequences of the
pandemic will be worse than the Great Depression. 
Many medium and smaller sized companies, especially family-owned private businesses, lack a
comprehensive corporate finance or accounting function that can deploy the tools needed in the
current crisis.  Assess your internal finance structure and talents, accounting, and cash-management
capabilities, and add resources as necessary.
Get a business management advisor if you have to. You might have to go outside your company for the
requisite accounting and cash-management assistance. If you need them, you should leverage the skills
of your accountants and consultants. They can help you develop and examine an accurate financial
picture for your company as well as create the financial tools that you'll need to best manage your
business moving forward.

Strengthen your cash management tools and strategy today to increase the chances for being in
business tomorrow.