You Must Manage Your Company Cash Flow Carefully During A Crisis
In times of crisis, delaying investment and making capital cost-efficient is a wise way to maintain business. This step is needed to keep cash flow healthy. If under normal conditions expansion becomes a smart move, then this time you need to refrain from developing the business and pouring large amounts of capital costs. It’s because when business activities do not go well, as usual, you do not need a large capital cost to drive business operations. Large capital expenditure will only be borne by the company. Aside from that, if your company needs a reliable bookkeeper, we suggest you go to Richard Darcy Gold Coast Bookkeepers.
In addition to delaying investment, you are also advised to review the agreement on payment of stock items as part of managing cash flow. If necessary, you can build cooperation in spending or consider paying installments on purchases.
Then, another thing that needs to be done in managing cash flow during crisis conditions is to review the debt payment provisions. In a sense, you need to negotiate with a supplier or other indebted party to postpone or extend the obligation payment period.
Utilizing the maximum available period is one step in extending the payment period. Usually, the payment extension period is given for 60 days to 90 days.
Thus, you have sufficient time to collect accounts receivable without having to incur short-term credit payment fees. In addition, funds that should be paid to pay obligations can also be diverted to be kept as an emergency fund budget to deal with a crisis.
Conversely, if you still have qualified cash, you can also take advantage of the situation by attracting the benefits of early debt payment incentives. Basically, obligations must be fulfilled, whether later or now. If the indebted party has a policy of giving a discounted payment incentive, it can be used as a way for you to do efficiency.
Finally, as a business person, you certainly cannot be separated from those who support the business. External and internal parties are directly related to business activities, such as employees, shareholders, suppliers, consumers, business partners, competitors, creditors, government, and society.
For this reason, preparing a comprehensive cash flow statement on a regular basis will make it easier for you to specify estimates for working capital or investment capital.