Your Cash Flow
You and your Management Team will need to remain calm as you lead your employees through this crisis. This will allow for decisive and clear decisions to be made without any undue disruptions. If you are calm, you will have a competitive advantage over most businesses.
Remaining positive and being seen to be positive is the best way through any crisis.
Outstanding Accounts Receivable
Double down on verifying outstanding invoices with customers, so you know there is no realistic reason for a customer to dispute or delay payment when the time comes.
Confirm Expected Receipt Dates
Confirm the date that your customer has in their payable schedule for paying your invoices. You can then send reminders to see if the payment arrives on time, and if not you have an alarm bell to be proactive in following up your cash flow.
Chase Up Late Payments FAST
Don’t be complacent in chasing late payments. You need to set a standard with your customers of what is expected. It’s proven that setting the expectation means you will be paid quicker than the other suppliers who are not chasing up on this.
Sell Unused Equipment
Be realistic about what equipment you need in your business. Decide if you can sell any underutilised or obsolete equipment so as to create your cash “war chest”.
Fixed Term Contracts
Discuss these with Suppliers and ask if they can be reduced or cancelled. Don’t assume that suppliers won’t work with you. You paying a supplier a smaller payment will be better for them than receiving no payment if your business closes.
Discuss terms with your suppliers to see if you can extend your terms, have a cash reserve request or get a discount from your suppliers if you pay early.
Reduce costs where possible. Many businesses have extras that in the good times seem to be needed (e.g. lunches, training courses). Be critical and if there is an expense that will not put you at risk or reduce productivity at this time, then think seriously about cutting it.