In this first part of our "WE'RE IN THIS TOGETHER" series, Gabby MacSweeney, our cashflow expert from Fluidly, has recorded a short video and provided a useful checklist to help business owners make accurate decisions with confidence during the recovery phase of COVID-19.
"We're now looking to move to a recovery phase of COVID-19 and it's now becoming clear that it's not going to be as simple as going back to your original business cashflow plan that you set before the crisis. Businesses are facing unique challenges over the coming months as government schemes are winding down, such as the job retention scheme and payment holidays and yet there's still a lot of consumer uncertainty and added costs involved in forcing social distancing. Therefore, it's going to be a balancing act between moving ahead and reopening the business and going back towards growth, but also applying caution and not increasing your costs so that they then spiral out of control.
So, in order to achieve this balance, the return to usual will have to be phased and it's important to think about as many different options and scenarios as possible.
Taking it back to the absolute basics of managing cashflow it's really about 3 things:
In understanding where you are now, one of the first things to do, is to get your records straight before you start thinking about creating a plan of action or understanding or diagnosing the situation in your business, you must have all the information possible in your accounting software. and get that all reconciled and up to date first.
In terms of managing cash in, the first things to do is think about the money that's already owed to you from your debtors. Make sure your processes are really up to scratch and you're being efficient at collecting all the money that's owed. Also, don't be afraid to think about external financing options. The government still has on offer some really beneficial schemes in terms of rates and borrowing money, so don't be afraid to make the most of them.
Finally, in terms of managing cash out, it's a really good idea to have an understanding of all you outgoing costs and be pragmatic in thinking if there are any non-essential costs that you can cut for a period of time. But if you do find yourself in a tight situation, don't be afraid to talk and communicate with your suppliers. They understand that the position is as tough as ever and you may be able to agree to some payment plans or defer some payments in those situations."
Support and Advice
Gabby MacSweeney, Account Director at Fluidly
Fluidly is a cashflow management tool, designed to help you plan with confidence.
To find out more, please get in touch.
Thanks for sticking with us for blog number 1 in this series – next time up, we will be joined by Natalie Tickle, Head of memberships at the London charity, Heart of the City (HOTC). A good business recognises the value of its people and COVID-19 has highlighted that putting your people first isn't just a "nice thing to do", it can also help your business to succeed. In this blog, Natalie shares some of the key lessons they've learnt during this time.